56068
          Distortions to Agricultural Incentives
                                                in Asia


                                 Kym Anderson and Will Martin



                                         University of Adelaide
                                      kym.anderson@adelaide.edu.au



                                         DECRG-TR, World Bank
                                         wmartin1@worldbank.org




Agricultural Distortions Working Paper 59, December 2007

This is a product of a research project on Distortions to Agricultural Incentives, under the leadership of Kym
Anderson of the World Bank's Development Research Group. It appears as Ch. 1 in Anderson, K. and W. Martin
(eds.) Distortions to Agricultural Incentives in Asia, Washington DC: World Bank, forthcoming December 2008.
Revised versions of the country case studies (Agricultural Distortions Working Paper Nos. 24-34) also appear as
chapters in that volume.

The authors are grateful for the distortions estimates provided by authors of the focus country case studies, for
assistance with spreadsheets by Johanna Croser, Esteban Jara, Marianne Kurzweil, Signe Nelgen, Francesca de
Nicola, Damiano Sandri and Ernesto Valenzuela, and for funding from World Bank Trust Funds provided by the
governments of Japan, the Netherlands (BNPP) and the United Kingdom (DfID). This Working Paper series is
designed to promptly disseminate the findings of work in progress for comment before they are finalized. The views
expressed are the authors' alone and not necessarily those of the World Bank and its Executive Directors, nor the
countries they represent, nor of the institutions providing funds for this research project.
    Distortions to Agricultural Incentives in Asia

                              Kym Anderson and Will Martin




For decades farm earnings have often been depressed by pro-urban, anti-agricultural
biases of government policies in developing countries. True, progress has been made
since the latter 1980s by many countries in reducing the policy bias, and indeed these
changes have been transformational in China and to a lesser extent in India. But many
trade-reducing price distortions remain between sectors, as well as within the
agricultural sector of low- and middle-income countries, including in Asia. This
matters for the majority of households in the world, because 45 percent of the global
workforce is employed in agriculture and 75 percent of the world's poorest
households depend directly or indirectly on farming for their livelihoods. It matters
even more in Asia's developing economies where 60 percent of the workforce and 81
percent of the poor (625 million people earning less than $1/day) are engaged in
agriculture (World Bank 2007, Chen and Ravallion 2007).
        This study is part of a global research project seeking to understand the
changing extent and the effects of the policy bias against agriculture and the reasons
behind the policy reforms in Africa, Europe's transition economies, and Latin
America and the Caribbean, as well as in Asia. 1 One purpose of the project is to
obtain quantitative indicators of past and recent policy interventions. A second
objective is to gain a deeper understanding of the political economy of trends in
distortions to agricultural incentives in different national settings. Our third purpose is
to use this deeper understanding to explore the prospects for further reducing the
distortions to agricultural incentives and discover the likely implications for
agricultural competitiveness, inequality and poverty alleviation in the major countries
of the world.



1
  The other three regional studies are Anderson and Masters (2008), Anderson and Swinnen (2008),
and Anderson and Valdés (2008). Together with comparable studies of high-income countries (which
includes Japan), they form the basis for a global overview volume (Anderson 2009a).
                                            2


       The compilation of new annual time series estimates of protection and taxation
of farmers over the past half century is a core component of the first stage of this
research project. These estimates are used to help address such questions as the
following: Where is there still a policy bias against agricultural production? To what
extent has there been overshooting in the sense that some developing-country food
producers are now being protected from import competition along the lines of the
examples of earlier-industrializing Europe and Japan? What are the political economy
forces behind the more-successful reformers, and how do they compare with those in
less-successful countries where major distortions in agricultural incentives remain?
Over the past two decades, how important have domestic political forces been in
bringing about reform relative to international forces (such as loan conditionality,
rounds of multilateral trade negotiations within the General Agreement on Tariffs and
Trade, regional integration agreements, accession to the World Trade Organization,
and the globalization of supermarkets and other firms along the value chain) and
compared with forces operating in earlier decades? What explains the pattern of
distortions within the agricultural sector of each country? What policy lessons and
trade implications may be drawn from these differing experiences with a view to
ensuring better growth-enhancing and poverty-reducing outcomes--including less
overshooting that results in protectionist regimes--in Asian and other still-distorted
developing countries during their reforms in the future?
       The study is timely for at least four reasons. One is because the World Trade
Organization (WTO) is in the midst of the Doha round of multilateral trade
negotiations, and agricultural policy reform is one of the most contentious issues in
those talks. Second, countries are seeking to position themselves favorably also in
preferential trade negotiations, and in the wake of other forces of globalization such as
the information, communication, agricultural-biotechnology and supermarket
revolutions. Third, poorer countries and their development partners are striving to
achieve their United Nations­encouraged Millennium Development Goals by 2015,
the prime ones being the alleviation of hunger and poverty. And fourth, the outputs of
the study are timely also because world food prices have spiked in 2008 at very high
levels and governments in some developing countries, in their panic to deal with the
inevitable protests from consumers, have reacted in far from optimal ways. Such
spikes have occurred in the past, most notably in 1973-74, and lessons as to what
policy responses work better than others can be drawn from that set of experiences.


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The empirical estimates reported here reveal that governments in Asia have differed
in their past responses to such shocks, although much less so with respect to rice, the
region's main staple.
         The Asian part of this study is based on a sample of twelve developing
economies. We exclude Japan, which was a high income country throughout our
review period and so is analyzed separately as part of the high-income group in the
project's global overview volume (Anderson 2009a). In Northeast Asia we include the
People's Republic of China (the mainland excluding Hong Kong, Macao and Taiwan,
herein referred to as China), the Republic of Korea (the southern part of the Korean
peninsula, herein referred to as Korea) and Taiwan Province of China (herein referred
to as Taiwan). We include for Southeast Asia the five large economies of Indonesia,
Malaysia, the Philippines, Thailand and Vietnam, while for South Asia we include the
four largest economies of Bangladesh, India, Pakistan and Sri Lanka. In 2000­04
these economies (all of which are now WTO members) together accounted for more
than 95 percent of the agricultural value added, farm households, total population and
total gross domestic product (GDP) of Asia. 2 Estimates of distortions are provided for
as many years as data permit over the past five decades (an average of 42 years), and
for an average of 8 crop and livestock products per economy which in aggregate
amounts to about 70 percent of the gross value of agricultural production in each of
those economies. The time series and country coverage greatly exceed that of earlier
studies such as Anderson and Hayami (1986), Krueger, Schiff and Valdes (1991),
Orden et al. (2007), and OECD (2007); and the product coverage is broader in each of
the present case studies than in all earlier ones other than the OECD's. 3
         The key characteristics of these economies--which accounted in 2000-04 for
only 10 percent of worldwide GDP but 37 percent of agricultural value added, 51

2
  Apart from the urban islands of Hong Kong and Singapore, the omitted Asian and Pacific economies
with popuations above one million are thus North Korea, Mongolia, Cambodia, Laos, Myanmar, Papua
New Guinea, Afghanistan, and Nepal ­ which together contributed in 2004 less than 5 percent of the
population, 4 percent of agricultural GDP and 2 percent of total GDP of all Asian and Pacific
developing economies.
3
  Anderson and Hayami (1986) only examine Japan, Korea and Taiwan and only from 1955 to 1982
(apart from providing rice distortion estimates back a further five decades); Krueger, Schiff and Valdes
(1991) analyse Korea, Malaysia, Pakistan, the Philippines, Sri Lanka and Thailand but for only 4 or 5
crops from 1960 to 1984; Orden et al. (2007) provide producer support estimates for just China, India,
Indonesia and Vietnam and for the period since 1985; and the OECD (2007) has been covering its two
Asian members, Japan and Korea, since 1986 (but has also begun examining China ­ see OECD 2005).
All of these earlier studies show the average nominal rate of assistance to farmers being higher in
higher-income settings and where agricultural comparative advantage is weaker, and to be much higher
for the import-competing sub-sector than for exporters of farm products in each economy.


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percent of the global population and 73 percent of the world's farmers--are shown in
table 1.1. The table reveals the considerable diversity within the region in terms of
stages of development, relative resource endowments, comparative advantages and
hence trade specialization, and the incidence of poverty and income inequality. These
economies thus provide a rich sample for comparative study.
         Per capita incomes in Bangladesh, India and Vietnam are barely one-twelfth
the global average. In Indonesia, the Philippines and Sri Lanka it is around one-sixth,
whereas in China it is more than one-quarter, in Thailand more than one-third, and in
Malaysia around three-quarters of the world average. Korea and Taiwan look
exceptional in that they currently have more than twice the global average per capita
income, but it needs to be remembered that in the 1950s, at the start of the period
under study, those two economies were among the poorest in the world.
         In terms of endowments of agricultural land per capita, Korea and Taiwan are
again exceptional in having only one-twentieth of the global average endowment
ratio. Bangladesh has only a little more, followed by Sri Lanka and the Philippines.
Even Indonesia, India and Pakistan have only about one-quarter of the global average
endowment, while Malaysia and Thailand have about two-fifths and China one-half. 4
That is, none of these Asian economies are relatively well endowed with crop or
pasture land, and on a per capita basis the region has only one-third the global
average. This might suggest Asian economies would have a low comparative
advantage in agricultural goods, were it not for two facts: these economies are at
varying stages of industrial development, and the quality of and institutional
arrangements/entitlement to their land and water vary greatly. As a result, so too do
their strengths in terms of agricultural competitiveness. Those differences are
reflected in the indexes of revealed comparative advantage (RCA) and trade
specialization shown in table 1.1. A majority of our focus economies have an RCA
index well above 100, indicating the extent to which the share of agricultural and food
products in the country's merchandise trade exceeds the global average share, but for
Korea and Taiwan that index is below 30 and for China and the Philippines it is
around 60. The index of agricultural trade specialization (net exports as a ratio of
exports plus imports of farm products, and so ranging between -1 and +1) is positive


4
 In terms of overall (as distinct from just crop and pasture) land endowment per capita, China is only
one-third of the global average.


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for half of our focus economies but is as low as -0.7 for Bangladesh, Korea and
Taiwan.
       Income inequality has risen a little over the past two decades but is still low
throughout much of the region compared with the rest of the world: as of 2004, the
Gini coefficient is between 0.40 and 0.49 for Malaysia, the Philippines, Sri Lanka and
Thailand and averages between 0.31 and 0.37 for the rest of the region. The regional
average of 0.36 contrasts with, for example, an average of 0.52 for Latin America.
Likewise, the Gini coefficient for land distribution is relatively low in Asia, at just
0.41 for China and Pakistan and below 0.50 also in Bangladesh, Indonesia, Korea,
Taiwan and Thailand. Vietnam is just on 0.5, and India is 0.58, but even these imply
reasonably even distributions of land, compared with in Latin America where the Gini
coefficient for land distribution is above 0.7 for the major countries such as Argentina
and Brazil and possibly for the region as a whole (World Bank 2007). A significant
proportion of the rural population is landless in South Asia, however, so 31 percent of
that sub-continent's population was still living on less than $1 a day in 2004
compared with just 9 percent in East Asia (table 1.1).
       The extent of poverty decline in Asia since 1981 has been unprecedented in
world history. The number of Asian people living on less than $1/day (1993 PPP) has
halved since then. Most of that decline has been in East Asia, especially China, and
represents a decline from 58 to less than 10 percent of the population; but even in
South Asia the proportion has fallen from one-half to less than one-third (table 1.2).
During the ten years to 2002, no less than three-quarters of that decline in the
proportion of Asia's poor occurred in rural areas, and another one-sixth was due to a
movement out of poverty by rural people migrating to better opportunities in urban
areas (Chen and Ravallion 2007).
       Policy developments have made non-trivial contributions to the growth,
structural changes and poverty alleviation observed in Asia over the past five decades.
The transformational move away from planning and state-owned enterprises to greater
dependence on markets and private entrepreneurship has had a particularly dramatic
effect in China and Vietnam from the 1980s, but India too has been benefiting from
similar reforms from the early 1990s. Also important has been the move in market
economies away from import-substituting industrialization towards export-oriented
development strategies, beginning in Taiwan around 1960 and soon followed by
Korea, then by several Southeast Asian countries, and now also by South Asia.


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Agricultural policies were not the only ­ or even the main ­ target of these reforms,
but they were an integral part of the process.
        This chapter begins with a brief summary of economic growth and structural
changes in the region since the 1950s and of agricultural and other economic policies
as they affected agriculture before and after the various reforms ­ and in several cases
fundamental regime changes ­ of the past half-century. 5 It then introduces the
methodology used by the authors of the individual country studies to estimate the
nominal rate of assistance (NRA) and the relative rate of assistance (RRA) to farmers
delivered by national farm and nonfarm policies over the past several decades
(depending on data availability), as well as the impact of these policies on the
consumer prices of farm products. Both farmer assistance and consumer taxation will
be negative in periods where there is an anti-agricultural, pro-urban consumer bias in
a country's policy regime. The chapter subsequently provides a synopsis of the
empirical results detailed in the country studies in this volume, without attempting to
also survey the myriad policy changes discussed in detail in the following chapters.
The final sections summarize what we have learned and draw out implications of the
findings, including for poverty and inequality and for possible future directions of
policies affecting agricultural incentives in Asia.




Growth and structural changes 6




The most striking economic characteristic of Asia's developing economies, and
especially those in East Asia, is their rates of economic growth and industrial
development over the past three decades (and even longer for Korea and Taiwan). The
recent report of the Commission on Growth and Development (Spence 2008) noted
that 13 of the world's economies have had sustained growth of real per capita income
of more than 7 percent for at least 25 consecutive years since World War II, and nine


5
  Apart from the regime changes that occurred during this period, such as the move from socialism to
the market in China and Vietnam, and the opening of India and several other economies, the region saw
the end of colonization between the late 1940s and late 1950s: Korea and Taiwan from Japan in 1945,
India and Pakistan from Britain in 1947, Indonesia from the Netherlands in 1949, Indochina from
France in 1954, and Malaya from Britain in 1957.
6
  The rest of this chapter draws in part on Anderson (2008).


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of those are East Asian. 7 Between 1980 and 2004, East Asia's per capita GDP grew at
6.3 percent per year and South Asia's at 3.4 percent, which contrasts with the global
average of just 1.4 percent. Asia's industrial growth in that period was 8.6 percent per
year compared with the world's 2.5 percent; and even agricultural growth in Asia was
more than half as high again as in the world as a whole (3.1 compared with 2.0
percent per year ­ see table 1.3). A consequence is that per capita incomes of some
Asian economies have been converging rapidly ­ albeit from a low base ­ on those of
rich countries, while other developing and transition economies have, on average been
slipping further away from the US level (figure 1.1).
         A key driver of the rapid growth and industrialization of Asia has been the
decision by many countries of the region to become more open and switch away from
an import-substituting development strategy to one that is export oriented. That
change occurred at different times in our focus countries, beginning with Taiwan and
then Korea in the 1960s. China joined the group from the late 1970s, Vietnam in the
mid-1980s, and India haltingly in the early 1980s but more concertedly from 1991. As
a result, export volumes grew at double-digit rates (last column of table 1.3); the share
of exports in GDP rose steadily for the region, more than doubling in the 30 years to
2004 (table 1.4); and the East Asian region's share of global exports of non-food
manufactures has quadrupled since 1990, thanks especially to China's
industrialization. China in 2006 accounted for 11 percent of the world's
manufacturing exports, compared with less than 1 percent in 1990: a twenty-fold
increase in current dollar terms. But the increase for all our other focus countries in
Asia has averaged nearly five-fold, and all of them have contributed to the region's
growing share of global manufacturing exports since 1990 (table 1.5). 8
         With that export-led growth has come dramatic restructuring of Asia's
economies away from agriculture and towards not only manufacturing but also service
activities. In East Asia the farm sector's share of GDP is now less than 30 percent of
what it was in the latter 1960s, and even in slower-growing South Asia it has less than
halved over that period. The biggest changes are in China and Indonesia, where
agriculture's shares of GDP have dropped from more than 40 and 50 percent,
respectively, in the 1960s to 13 percent by 2005. Bangladesh also has transformed

7
  The nine are Japan, Korea, Taiwan, China, Indonesia, Malaysia, Thailand, Hong Kong and Singapore.
Brazil is the only other large economy in the set, the other three being Botswana, Malta and Oman.
8
  By contrast, the focus countries of Asia's share of global exports of agricultural and food products has
grown very little (from 11.0 to 13.5 percent between 1990 and 2006).


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remarkably: agriculture's share was 54 percent in 1965-69 when all other non-service
industries accounted for just 9 percent, and now industry's share is well above
agriculture's (27 versus 20 percent in 2005). Pakistan, Sri Lanka and the Philippines,
being the slowest-growing of our focus economies, have been the slowest to move
away from agriculture since the 1960s. At the other extreme are Korea and Taiwan,
which now have only 2 or 3 percent of their GDP coming from farming. For Asia as a
whole, agriculture is now less than one-eighth of GDP (down from more than one-
third in the late 1960s), industry has risen from 27 to 38 percent, and services from 35
to 49 percent (table 1.6).

       The shares of overall employment accounted for by farming activities have
fallen somewhat more slowly than agriculture's GDP shares, according to statistics in
the FAOSTAT Database of the Food and Agriculture Organization of the United
Nations (which, because of definitional differences, is not always consistent with
databases within countries). These shares remain at much higher levels than the GDP
shares, implying relatively low and labor productivity on farms. The most rapid
declines have occurred in Korea and Taiwan, where the employment share in
agriculture has fallen from around 50 percent to less than ten percent during the past
40 years. Malaysia too has seen a major fall, from 57 to 18 percent of the workforce.
Elsewhere in Asia, however, a very large share of employment remains predominantly
in farming (table 1.7). These shares would be somewhat less in full-time equivalent
terms when more-careful account is taken of part-time off-farm work activities (see,
e.g., Otsuka 2006), but nonetheless they underscore the importance of incentives
faced by farmers for the well-being of the majority of Asia's households.

       Agriculture's average share in Asia's merchandise exports has declined even
more dramatically than the GDP share, from 45 percent to just 7 percent in the past
four decades. During that period the share of non-primary goods has doubled, to 85
percent. Among our 12 focus countries, only natural resource-rich Indonesia has less
than three-quarters of its exports coming from such goods (table 1.8). The declining
relative importance of farm exports has been much more rapid in Asia than in the rest
of the world: the index of the revealed agricultural comparative advantage for Asia
(defined as the share of agriculture and processed food in national exports as a ratio of
the share of such products in worldwide merchandise exports) has fallen since the



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1980s by about two-thirds in East Asia and one-third in South Asia. So too has the
index of agricultural trade specialization (defined as net exports divided by the sum of
the imports and exports of agricultural and processed food products). That index,
which ranges from -1 to +1, has become increasingly less positive or has become
negative in virtually all our focus countries over recent decades (table 1.9).
       That apparent decline in agricultural comparative advantage is evident in the
self-sufficiency data for primary farm products. Until 30 years ago the region was
almost exactly 100 percent self-sufficient in farm products, but since then that
indicator has declined to less than 85 percent. The share of farm production exported
has not changed much, averaging in the 4-6 percent range (although there have been
substantial changes in individual countries, with declines in Malaysia, the Philippines,
Sri Lanka and Taiwan offset by increases in countries such as Vietnam, Thailand and
China). By contrast, since the latter 1970s the share of imports in domestic
consumption of farm products has quadrupled, to around 20 percent (table 1.10).
       As will become clear below, the increasing dependence on imports of farm
products in Asia has occurred despite reductions in the taxation of agricultural exports
and increases in incentives provided to farmers via government policy reforms. These
reforms probably have contributed to poverty alleviation in Asia. Using a simpler
price indicator than developed below, Ravallion and Chen (2007) show that the
reduction in the anti-agricultural bias in farm price policies has contributed
significantly to China's poverty reduction. As well, rural growth has been shown to be
a key contributor to the reduction in poverty in India (Ravallion and Datt 1996). These
types of studies will be able to be revisited using the more comprehensive set of
measures of the extent of changes in distortions to agricultural incentives summarized
below. To generate those measures, a common methodology was adopted by the
authors of the country case studies in this volume. A summary of the methodology
follows, and further details can be found in Anderson et al. (2008) which is
reproduced as Appendix 1 in this book.




Methodology for measuring rates of assistance/taxation




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The nominal rate of assistance (NRA) is defined as the percentage by which
government policies have raised gross returns to producers above what they would be
without the government's intervention (or lowered them, if NRA<0). If a trade
measure is the sole source of government intervention, then the measured NRA will
also be the consumer tax equivalent (CTE) rate at that same point in the value chain.
But where there are also domestic producer or consumer taxes or subsidies, the NRA
and CTE will no longer be equal and at least one of them will be different from the
price distortion at the border due to trade measures. 9
         There are several purposes for which NRAs and CTEs can be used, and the
purpose chose affects the appropriate choice of methodology. This project uses them
to achieve three purposes. One is to generate a comparable set of numbers across a
wide range of countries and over a long time period, with the consequence that the
methodology needs to be both simple and somewhat flexible. Another purpose is to
provide a single number to indicate the total extent of transfer to (or from) farmers
due to agricultural policies ­ the NRA; and another number for the extent of transfer
to (or from) consumers ­ the CTE. Both are expressed either as a percentage of the
undistorted price or in dollar terms. This is what the OECD's PSE and CSE do, both
of which can be negative when transfers from exceed transfers to the relevant group.
This research project's agricultural NRA and CTE are similar in spirit to the OECD's
PSE and CSE but with some important differences outlined below. And the third
purpose is to enable economic modelers to use the NRAs for individual primary and
lightly processed agricultural products as producer price wedges, and the CTEs as
consumer price wedges, in single-sector, multi-sector and economy-wide policy
simulation models by allocating those wedges to particular policy instruments such as
trade taxes or domestic producer or consumer subsidies.
         The NRAs are based on estimates of assistance to individual industries. Great
care has gone into generating the NRA for each covered agricultural industry,
particularly in countries where trade costs are high, pass-through along the value



9
  Our definition of a policy-induced price distortion follows Bhagwati (1971) and Corden (1997) and
includes any policy measure at a country's border (such as a trade tax or subsidy, a quantitative
restriction on trade, or a dual or multiple foreign exchange rate system, assuming the country is small
enough to have no monopoly power in international markets), or any domestic producer or consumer
tax/subsidy/restraint on output, intermediate inputs or primary factors of production (except where
needed to directly overcome an externality, or where it is set optimally across all products or factors,
for example as a value added tax to raise government revenue).


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chain is affected by imperfect competition, and markets for foreign currency have
been highly distorted at various times and to varying degrees in the past.
       Most distortions to industries producing tradables come from trade measures,
such as a tariff imposed on the cif import price or an export subsidy or tax imposed on
the fob price at the country's border, or quantitative restrictions on trade. Since an ad
valorem tariff or export subsidy is the equivalent of a production subsidy and a
consumption tax of the same rate expressed as a percentage of the border price, it is
that which is captured in the NRA and CTE at the point in the value chain where the
product is first traded. To get the NRA for the farmer, authors of the country studies
estimated or guessed the extent of pass-through back to the farm gate, and added any
domestic farm output subsidies. To obtain the CTE they also added any product-
specific domestic consumer taxes to the distortion from border measures. Note that
the NRA and CTE differs from the OECD's PSE and CSE in that the latter pair are
expressed as a percentage of the distorted price and hence will be lower (for positive
protection rates) than the former pair which are expressed as percentages of the
undistorted price.
       We decided against seeking estimates of the more complex effective rate of
assistance (ERA) even though it is, in principle, a better partial equilibrium single
measure of distortions to producer incentives than the nominal rate. The reason is that
to do so requires knowing each product's value added and various intermediate input
shares of output. Such data are not available for most developing countries even every
few years, let alone for every year in the long time series that is the focus of this
study. And in most countries distortions to farm inputs are very small compared with
distortions to farm output prices. But where there are significant product-specific
distortions to input costs, they are captured by estimating their equivalence in terms of
a higher output price and including that in the NRA for individual agricultural
industries wherever data allow. Any non-product-specific distortions, including
distortions to farm input prices, are also added into the estimate for the overall
sectoral NRA for agriculture as a whole.
       The targeted minimum coverage of products for NRA estimates was 70
percent, based on the gross value of farm production at undistorted prices. This target
degree of coverage is similar to that for the OECD's PSEs. Unlike the OECD,
however, in this project we do not routinely assume that the nominal assistance for
covered products would apply equally to non-covered farm products. This is because


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in developing countries the agricultural policies affecting the non-covered products
are often very different from those for covered products. For example, nontradables
among non-covered farm goods (often highly perishable or low-valued products
relative to their transport cost) are often not subject to direct distortionary policies.
The authors of the country case studies were asked to provide three sets of
`guesstimates' of the NRAs for non-covered farm products, one each for the import-
competing, exportable and nontradable sub-sectors. Weighted averages for all
agricultural products were then generated, using the gross values of production at
unassisted prices as weights. For countries that also provide non-product-specific
agricultural subsidies or taxes (assumed to be shared on a pro-rata basis between
tradables and nontradables) or assistance decoupled from production, such net
assistance is then added to product-specific assistance to get a NRA for total
agriculture, and also for tradable agriculture for use in generating the Relative Rate of
Assistance (RRA, defined below).
         How best to present regional aggregate NRA and RRA estimates depends on
the purpose for which the averages are required. We generate a weighted
average NRA for covered products for each country, because only then can we add
the NRA for non-covered products and from non-product-specific assistance to get
the NRA for all agriculture. When it comes to averaging across countries, each polity
is an observation of interest, so a simple average is meaningful for the purpose of
political economy analysis. But if one wants a sense of how distorted a whole region's
agriculture is, a weighted average is needed. The weighted average NRA for covered
primary agriculture can be generated by multiplying each primary industry's share of
the gross value of production (valued at the farm-gate equivalent undistorted prices)
by its corresponding NRA and adding across industries. 10 The overall sectoral rate,
which we denote NRAag , can be obtained by adding also the actual or assumed
information for the non-covered farm commodities and, where it exists, the aggregate
value of non-product-specific and decoupled assistance to agriculture.



10
  Corden (1971) proposed that free-trade volume be used as weights, but since they are not observable
(and an economy-wide model is needed to estimate them) the common practice is to compromise by
using actual distorted volumes but undistorted unit values or, equivalently, distorted values divided by
(1+ NRA). If estimates of own-and cross-price elasticities of demand and supply are available, a partial
equilibrium estimate of the quantity at undistorted could be generated, but if those estimated elasticities
are unreliable this may introduce more error than it seeks to correct.


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      A weighted average can be similarly generated for the tradables part of
agriculture ­ including those industries producing products such as milk and sugar
that require only light processing before they can be traded ­ by assuming that its
share of non-product-specific assistance equals its weight in the total. Call
that NRAag t .
       In addition to the mean, it is important to provide also a measure of the
dispersion or variability of the NRA estimates across the covered products. The cost
of government policy distortions to incentives in terms of resource misallocation tend
to be greater the greater the degree of substitution in production (Lloyd 1974). In the
case of agriculture which involves the use of farm land that is sector-specific but
transferable among farm activities, the greater the variation of NRAs across industries
within the sector then the higher will be the welfare cost of those market
interventions. A simple indicator of dispersion is the standard deviation of the covered
industries' NRAs .
       Each industry is classified either as import-competing, or a producer of
exportables, or as producing a nontradable (with its status sometimes changing over
the years), so that it is possible to generate for each year the weighted average NRAs
for the two different groups of tradables. Those NRAs are used to generate a trade
bias index, TBI, defined in percentage terms as:
(2)              TBI = 100[(1+NRAagx/100)/(1+NRAagm/100) ­ 1]
where NRAagm and NRAagx are the average percentage NRAs for the import-
competing and exportables parts of the agricultural sector. The TBI indicates in a
single number the extent to which the typically anti-trade bias (negative TBI) in
agricultural policies changes over time.
       Farmers are affected not just by prices of their own outputs but also, albeit
indirectly via changes to factor market prices and the exchange rate, by the incentives
nonagricultural producers face. That is, it is relative prices and hence relative rates of
government assistance that affect producer incentives. More than seventy years ago
Lerner (1936) provided his Symmetry Theorem that proved that in a two-sector
economy, an import tax has the same effect as an export tax. This carries over to a
model that also includes a third sector producing only nontradables, to a model with
imperfect competition, and regardless of the economy's size (Vousden 1990, pp. 46-
47). If one assumes that there are no distortions in the markets for nontradables and



                                            13
                                            14


that the value shares of agricultural and non-agricultural nontradable products remain
constant, then the economy-wide effect of distortions to agricultural incentives can be
captured by the extent to which the tradable parts of agricultural production are
assisted or taxed relative to producers of other tradables. By generating estimates of
the average NRA for non-agricultural tradables, it is then possible to calculate a
Relative Rate of Assistance, RRA, defined in percentage terms as:
(1)             RRA = 100[(1+NRAagt/100)/(1+NRAnonagt/100) ­ 1]
where NRAagt and NRAnonagt are the weighted average percentage NRAs for the
tradable parts of the agricultural and non-agricultural sectors, respectively. Since the
NRA cannot be less than -100 percent if producers are to earn anything, neither can
the RRA (assuming NRAnonagt is positive). And if both of those sectors are equally
assisted, the RRA is zero. This measure is useful in that if it is below (above) zero, it
provides an internationally comparable indication of the extent to which a country's
policy regime has an anti- (pro-)agricultural bias.
         In calculating the NRA for producers of agricultural and non-agricultural
tradables, the methodology outlined in Appendix 1 sought to include distortions
generated by dual or multiple exchange rates. Such direct interventions in the market
for foreign currency were common in some Asian countries in the 1970s and 1980s,
including China. However, authors of some of the focus country studies had difficulty
finding an appropriate estimate of the extent of that distortion, so the impact of that on
NRAs has not been included for all. Its exclusion for some countries (e.g., India)
means their estimated (typically) positive NRAs for importables and (typically)
negative NRAs for exportables are smaller than they should be. In cases where the
NRA for importables dominates that for exportables, this omission would lead to an
underestimate of the average (positive) NRA for such tradables sectors, and
conversely. And in either case it leads to an underestimate of the (anti-)trade bias
index.
         To obtain dollar values of farmer assistance and consumer taxation,
Valenzuela, Croser and Anderson (2008) have taken the country authors' estimates of
NRA and multiplied them by the gross value of production at undistorted prices to
obtain an estimate in current US dollars of the direct gross subsidy equivalent of
assistance to farmers (GSE). This is then added up across products for a country and
across countries for any or all products to get regional aggregate transfer estimates for



                                            14
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the studied economies. These GSE values are calculated in current and constant
dollars, and are also expressed on per-farm-worker basis.
        To obtain comparable dollar value estimates of the consumer transfer, the CTE
estimate at the point at which a product is first traded is multiplied by consumption
(obtained from the FAO's supply and utilization database) valued at undistorted prices
to obtain an estimate in current US dollars of the tax equivalent to consumers of
primary farm products (TEC). This too is added up across products for a country, and
across countries for any or all products, to get regional aggregate transfer estimates
for the studied economies. These TEC values are also expressed on per capita basis.




Estimates of Asian policy indicators




We begin with the nominal rates of assistance to agriculture, then compare them with
the nominal rates for non-agricultural tradables. Dollar equivalents of
assistance/taxation to farmers are also presented, and so too are the consumer tax
equivalents of policies as they affect buyers of farm products.


Nominal rates of assistance to agriculture

Agricultural price and trade policies reduced farmers earnings throughout the period
to the 1980s in developing Asia, 11 on average by more than 20 percent; but that
implicit taxation declined from the early 1980s and, from the mid-1990s, the NRA
switched sign and became increasingly positive. The average hides considerable
diversity within the region, however. Nominal assistance to farmers in Korea and
Taiwan was positive from the early 1960s (although very small initially), Indonesia
had some years in the 1970s and 1980s when its NRA was a little above zero (as did
Pakistan prior to Bangladesh becoming an independent country in1971), and India's
and the Philippines' average NRAs became positive from the 1980s (table 1.11). A
visual impression of both the differences across countries and the rise in average
NRAs is clear in figure 1.2, where 2000-04 is compared with 1980-84. This trend is

11
 Recall that the use of the word `Asia' throughout this chapter and volume is shorthand for our focus
Asian developing economies and thus excludes Japan.


                                                 15
                                             16


present for the vast majority of the commodity NRAs for the region too, with meat
and milk the only products to have seen their assistance rates cut over that period
(figure 1.3).
         Figure 1.3 also illustrates the diversity of the region's average NRAs across
farm commodities. As is true for other regions of the world, assistance is among the
highest for the `rice pudding' products of sugar, milk and rice. But even for those
three products there is a great diversity across countries in their NRAs, with 5-year
averages ranging from almost zero to as much as 400 percent for rice and 140 percent
for milk in Korea, and to 230 percent for sugar in Bangladesh (figure 1.4). This
suggests the production of these products within Asia may be far from optimally
allocated from the viewpoint of efficient resource use.
         There is a great deal of NRA diversity also across economies in their average
NRA, and across commodities within each Asian economy's farm sector, and the
extent of both types of diversity (as measured by the standard deviation) has grown
rather that diminished over the past five decades. The cross-economy diversity of
average NRAs is evident from the bottom of table 1.11 (weighted average rising from
around 25 percent in the early years under study to around 40 percent in recent years);
and the cross-commodity diversity within each economy is clear from table 1.12
(unweighted average), where the standard deviation of NRAs is reported for covered
products (which account for up to three-quarters of the value of agricultural
production at undistorted prices). It means that there is still much that could be gained
from improved resource reallocation both between economies and within the
agricultural sector of Asian economies, were differences in rates of assistance to be
reduced.
         A striking feature of the distortion pattern within the farm sector is its strong
anti-trade bias. This is evident in figure 1.5, which depicts the average NRAs for
agriculture's import-competing and export sub-sectors for the region: the former
average is always positive and its trend is upward-sloping, whereas the NRA average
for exportables is negative and became moreso in the 1980s before gradually
approaching zero thereafter. While the gap between the NRAs for those two sub-
sectors has diminished little since the 1960s for the region as a whole, there are
nonetheless several countries (Malaysia, Thailand, Pakistan, Sri Lanka) for which that
gap has narrowed and hence their trade bias index has come closer to zero (table
1.13).


                                             16
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       The rise in the average NRAs since the 1980s is too large to be explained just
by economies losing their comparative advantage in farm products as they
industrialize. As shown in the `export share' rows of table 1.13, the proportion of
tradable farm production that is produced by the export sub-sector has not declined
very much for most Asian economies. This suggests that the main motive for
interevention cannot be revenue raising via trade taxes. Nor can it be solely to reduce
distortions, for otherwise we would not have seen an `overshooting', in going from
taxing to assisting farmers on average, nor would we have seen an increase in
assistance to import-competing farmers.
       The contributions to the overall NRA for agriculture from input subsidies,
from domestic output taxes or subsidies, and from trade measures at the economy's
border are summarized in table 1.14. (Non-product-specific assistance, not shown
there, added only around two percentage points during the period of the study.)
Product-specific input price distortions contributed little on average to the overall
regional NRA for agriculture, reducing its negative value slightly in the 1960s and
adding slightly to its positive value during the past decade or so. India is where the
contribution of input subsidies is largest, especially in recent years when they have
added almost 10 pecentage points to the sector's NRA and have been a non-trivial
item in the government's overall budget. Earlier they were high for Indonesia too,
peaking at 7 percentage points in the 1980s before reforms brought them back to just
2 percentage points in recent years. There is even less in the way of domestic output
subsidies on average in the region now, although there had been some in earlier
decades in both India and Sri Lanka ­ while in China output taxes in kind were
prevelant until very recently (table 1.14).
       The US dollar value equivalent of the positive or negative assistance to
farmers due to agricultural price and trade policies has been non-trivial. The anti-
agricultural bias peaked for the region in the latter 1970s at more than $130 billion per
year in constant dollar terms (expressed in 2000 US dollars ­ see bottom row of table
1.15(a)). That is equivalent to a gross tax of around $170 for each person engaged in
agriculture. Most of that $130 billion was due to China's anti-agricultural policies,
with India the second biggest contributor in the 1960s and 1970s. Thanks to the
reforms of the past two decades, such taxation has gradually disappeared in all our
focus countries. But the reform does not mean there is no intervention now. Rather,
the former negative influence has been replaced by positive assistance to farmers in


                                              17
                                            18


most countries, totalling around $60 billion per year, with China, India and Korea
each contributing about one-quarter of that total. In recent years the total has averaged
around $60 per farm worker in Asia. That $60 is not small compared with per capita
income for the region, but it is very unevenly distributed: it ranges from between
$6900 and $5300 for farmers in Korea and Taiwan (more than one-third of those
economies' per capita income) to around $150 in the Philippines, $90 in Indonesia,
$60 in Malaysia, India and Vietnam, and virtually zero in Thailand, Bangladesh and
Pakistan (table 1.15(b)).
       Which products contribute to the Asia's positive or negative assistance to
farmers due to agricultural price and trade policies? Table 1.15(c) shows that the
negative contribution comes mainly from policies directly affecting the exportable
parts of Asian agriculture, while most of the positive contribution comes from
protecting import-competing producers. The NRAs by product, shown in Table
1.16(a), give some insight into which products are responsible, but they need to be
combined with information on each product's share of the gross value of production
(see Appendix 2) to obtain the dollar contributions by product that are shown in Table
1.16(b). Clearly rice, milk and sugar again are the most assisted industries today. But
note that back in the early 1980s, when China was still heavily taxing its farmers, the
net contribution of rice was negative and large. At that time poicies affecting pigmeat,
and fruits and vegetables, were equally large contributors to the effective taxation of
Asian farmers, again almost entirely because of China's influence.


Assistance to non-farm sectors and relative rates of assistance


The anti-agricultural policy biases of the past were due not just to agricultural
policies. Also important to changes in incentives afffecting inter-sectorally mobile
resources have been the significant reductions in border protection to the
manufacturing sector (which has been the dominant intervention in the tradables part
of non-agricultural sectors). That reduction in assistance to producers of non-farm
tradables has been even more responsible for the improvement in farmer incentives
than the reduction in direct taxation of agricultural industries.
       It has not been possible to quantifying the distortions to non-farm tradable
sectors as carefully as for agriculture. Authors typically have had to rely on applied
trade taxes (for exports as well as imports) rather than being able to undertake price


                                            18
                                                   19


comparisons, and hence they usually do not capture the quantitative restrictions on
trade which were important in earlier decades but decreasingly so through recent
times. 12 Nor do they capture distortions in the services sectors, some of which now
produce tradables (or would do in the absence of interventions preventing their
emergence). As a result the estimated NRAs for non-farm importables are smaller and
decline less rapidly than in fact was the case ­ and likewise for non-farm exportables,
except their NRAs in some cases would have been negative. Of those two elements of
under-estimation, the former bias certainly dominates, so the authors' estimate of the
overall NRA for non-agricultural tradables should be considered a lower-bound
estimate, and more so in the past so that its decline is less rapid than it should be. 13
         Despite these methodological limitations, the estimated NRAs for non-farm
tradables are very sizeable prior to the 1990s. For Asia as a whole, the average NRA
value has steadily declined throughout the past four or five decades as policy reforms
have spread. This has therefore contributed to a decline in the estimated negative
relative rate of assistance for farmers: the weighted average RRA has was worse than
-50 percent up to the early 1970s but improved to an average of -32 percent in the
1980s, -9 percent in the 1990s and is now positive, averaging 7 percent in 2000-04 (or
15 percent if the average is unweighted). The five-decade trends in RRAs and their
two component NRAs for each economy are summarized in table 1.17. It is clear from
figure 1.6 that the falling positive NRAs for non-farm producers has contributed even
more to the rise of the RRA in Asia than has the gradual disappearance of the negative
NRAs for farmers.
         Has the international location of production of farm products within Asia
become more or less efficient as a results of policy changes over the past five
decades? A global computable general equilibrium model with a time series of
databases is needed to answer that question well. But one very crude way of
addressing the question is to examine the standard deviation of RRAs across the
economies of the region over time. That indicator suggests distortions have become



12
   Also ignored are distortions to the prices of inputs into non-farm goods production, again in contrast
to their treatment in estimating agricultural NRAs.
13
   This bias is accentuated in those cases where distortions to exchange rates are not included, as noted
above in the methodology section. Exchange rate distortions were included in the studies for China,
Malaysia, Vietnam, Pakistan and Sri Lanka. Their impact was greatest in China, where it made the
RRA more negative to the extent of about 2 percenatage points in the 1970s, 6 percentage points in the
1980s and 3 points in the 1990s (see Table 7.5 in Chapter 7 of this volume).


                                                   19
                                            20


more dispersed across countries over time: it averaged 35 percent during 1960-74, 50
percent during 1975-89 and 55 percent during 1990-2004 (final row of table 1.17).
       Of the striking changes in RRAs shown for individual economies over the past
two decades in figure 1.7, it is the move from negative to positive RRAs for China
and India that matter most for the region ­ and indeed for the world. The extent of the
decline in the non-agricultural NRA since the early 1980s is very similar for those two
key countries, but the agricultural NRA has differed: in China the 5-year averages
have risen steadily from -45 percent to 6 percent, whereas in India it has been close to
zero except for a spike upward when international food prices collapsed in the mid-
1980s and for a rise in the present decade (figure 1.8).
       This dramatic rise in the RRA for the world's two most populous countries is
of great significance to the current analyses of the causes of the international food
price rises of the present decade. One of the contributors is said to be the growing
appetite for food imports by these two countries as they industrialize and their per
capita incomes rise. Yet as Table 1.10 shows, both countries have remained very close
to self sufficient in agricultural products over the past four decades. Undoubtedly the
steady rise in their RRAs has contributed to that outcome. It may also have helped
ensure that the trend in China's ratio of urban to rural mean incomes (adjusted for cost
of living differences) has been flat since 1980 (Ravallion and Chen 2006, Figure 3),
and that the Gini coefficient for India has hardly changed between 1984 and 2004
(Table 1.1). A major question, to which we return at the end of the chapter, is: will
their RRAs remain at their current neutral level of close to zero, or will they continue
to rise in the same way as observed in Korea and Taiwan and, before them, in Japan
and Western Europe?


Comparisons with other regions


The regional upward shift in agricultural NRAs and the RRAs towards zero and even
the move to positive agricultural NRAs and RRAs recently are not unique to Asia.
Figure 1.9 shows that similar trends, albeit less steep, have resulted from policy
reforms in other developing country regions over the past four decades, suggesting
that similar political economy trends might be at work as economies develop. This is
despite the fact that farm-nonfarm houeshold income inequality is very different in
Asia than in the rest of the world (figure 1.10). In the past it has been found that


                                            20
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agricultural NRAs and RRAs are positively correlated with per capita income and
agricultural comparative disadvantage (Anderson 1995). A glance at table 1.18
suggests that Asian economies have been ­ and continue to be ­ contributors to that
trend. This is confirmed statistically in the simple regressions with country fixed
effects shown in figure 1.11, and with the multiple regressions with country and time
fixed effects shown in table 1.19.


Consumer tax equivalents of agricultural policies


The extent to which farm policies impact on the retail consumer price of food and on
the price of livestock feedstuffs depends on a wide range of things including the
degree of processing undertaken and the extent of competition along the value chain.
We, like the OECD (2007), therefore attempt only to ask how much impact policies
have on the buyer's price at the point on the value chain where the farm product is
first traded internationally and hence where comparisons are made between domestic
and international prices (e.g., as milled rice, or raw sugar, or beef). To get weights to
make it possible to sum up across commodities and countries, if they were not
supplied from national sources we obtained consumption data either directly from the
FAO food balance sheets or, in the case of minor products, indirectly by using FAO
value of trade data and assuming the undistorted value of consumption is production
valued at undistorted prices plus imports minus exports.
         If there were no farm input distortions and no domestic output price distortions
so that the NRA was entirely the result of border measures such as an import or export
tax or restriction, and there were no domestic consumption taxes or subsidies in place,
then the CTE would equal the NRA for each covered product. But such domestic
distortions are present in several Asian economies. In Korea, for example, producer
prices have been well above consumer prices for several important crop products,
while in China the opposite was true at least until the early 1990s: producers of food
staples were taxed more than consumers were subsidized, even taking into account the
`iron rice bowl' in-kind partial wage payment received by many urban workers. 14
Also, because of international trade, the weights used to aggregate product distortion

14
   It is true also that consumers received staple food at effectively subsidized prices in South Asia via
`fair price shops'. But these hand-outs from the government were rationed sufficiently to be mostly
infra-marginal, and so are considered here as implicit income transfers rather than additional distortive
consumer subsidies.


                                                   21
                                                   22


rates on the consumption side differ from those on the production side of the market.
Hence the aggregate CTE differs somewhat from the aggregate NRA for each
economy, as can be seen by comparing the CTEs in table 1.20(a) with the NRAs in
table 1.11. The weighted average CTE for the region is negative until the early 1990s,
but above zero thereafter and increasingly so in recent years. The variance in CTEs
across products is even more now than before the reforms of the past two decades (see
table 1.20(b) including the bottom row).
         In proportional and in per capita terms the current transfers from consumers
are clearly largest in Korea and Taiwan (tables 1.20(a) and 1.21(b)), but in dollar
terms they are also large in China, India and Indonesia (table 1.21(a)). In the present
decade the transfer on average from consumers to producers in the region amounts to
around $35 billion per year. In the early 1980s, by contrast, the transfer was from
producers to consumers, and amounted to $50 billion per year at the producer level for
products covered in this project. Among the covered products, the biggest transfers
are again for milk, rice and sugar (table 1.21(c)).


The role of agricultural policies in stabilizing domestic prices


An often-stated objective of food policies in Asia (and elsewhere) is to reduce
fluctuations in domestic food prices and in the quantities available for consumption.
Nowhere is that more obvious than in rice, for which fluctuations in trade barriers are
frequently used as a buffer against domestic or international shocks, rather than using
trade as a source of cheaper imports or an opportunity for export earnings. Since Asia
produces and consumes four-fifths of the world's rice (compared with about one-third
of the world's wheat and maize), this market-insulating behavior of Asian policy
makers means that even by 2000-04 only 6.9 percent of global rice production was
traded internationally 15 (compared with 14 and 24 percent for maize and wheat), and
so international prices are much more volative for rice than for those other grains.
This in turn means that nominal rates of protection for rice would be above trend in
years of low international prices and conversely in years when international prices for
rice are high.


15
  This was up from the pre-1990s half-decade global shares which are all less than 4.5 percent (e.g.,
4.1 percent in 1985-89), and is greater than the Asian share of just 5.7 percent in 2000-04, according to
the project's database (Anderson and Valenzuela 2008).


                                                   22
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        Figure 1.12 reveals that this indeed is the case. Even when averaging over all
our focus countries in Southeast or South Asia, the negative correlation between the
rice NRAs and the international rice price is very high, at -0.59 for Southeast Asia and
-0.75 for South Asia. Moreover, that behavior is evident whether the NRA trend is
upward or downward. A clear illustration of the latter point is provided by Malaysia,
whose policy was reformed during its financial crisis years of 1985-87 when the
growth in rice protection was reversed (figure 1.13).
        This begger-thy-neighbor dimension of each economy's food policy reduces
hugely the international public good role that trade between nations can play in
bringing stability to the world's food markets. The more some countries insulate their
domestic markets, the more they export their volatility to the international market, and
the greater the resulting volatility in that marketplace. This, in turn, creates a
perceived need for other countries to do likewise. In most cases, volatility is exported
through changes in import tariffs; but export taxes and export controls are sometimes
also used by exporting countries. When NRAs in enough countries are adjusted in this
way to changes in international prices, this exacerbates those change in world prices
so that even larger changes in NRAs are desired--a classic collective action problem.
        A multilateral agreement to desist is thus needed. That is precisely what was
sought during the GATT's Uruguay Round Agreement on Agriculture via tariff
bindings and disciplines on administered domestic prices. Tariff bindings can reduce
the extent of the problem by restricting the range over which tariffs can increase in
response to low prices. But to date the bindings are so far above applied import tariffs
that this discipline on food-importing members in years of low international prices is
very weak. Moreover, there is no corresponding GATT or WTO discipline on food
export restrictions, which ­ as 2008 has starkly revealed ­ can be the problem in years
of high international prices.


Summary: What have we learned?

One of the most salient features of price and trade policies in the Asian region since
the 1960s is the spate of major economic reforms, including significant trade
liberalization. Overall levels of non-agricultural protection have declined
considerably, which has improved the competitiveness of the agricultural sector in
many economies but especially in China and India. Two other salient features have


                                             23
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been the gradual policy movement away from taxing agricultural exportables, and at
the same time ­ and in contrast to non-agriculture ­ a rise in agricultural import
protection.
         These features are captured in figure 1.14, which shows agriculture's trade
bias index on the horizontal axis and the RRA on the vertical axis. An economy with
no anti-agricultural bias (RRA = 0) and no anti-trade bias within the farm sector (TBI
= 0) would be located at the intersection of the two axes in figure 1.14. China and all
the focus countries of South and Southeast Asia were to the southwest of that neutral
point as of 1980-84, but by 2000-04 most had moved ot the right to become closer to
the vertical axis (meaning they had reduced their anti-trade bias in agriculture). Most
had shifted up to become also closer to the horizontal axis; but some are now above
rather than below that axis, which means they are assisting farmers relative to
producers of other tradable products ­ which can lead to just as much waste of
resources as the earlier, anti-agricultural, policy bias.
         More specifically, the following features of the Asian experience of the past
five decades are worth highlighting by way of summarizing the key findings of this
regional study.
         Since the 1950s the region has seen a gradual movement away from taxing
farmers relative to non-agricultural producers and the emergence during the most
recent decade of positive assistance on average for Asian farmers. The gradual fall in
the estimated (negative) RRA for the region, from more than -50 percent up to the
early 1970s to small positive rates in the past decade, has been not dissimilar to but is
more dramatic than the trends in Africa and Latin America. Instead of being
efffectively taxed more than $130 billion per year as in the late 1970s/early 1980s (or
$170 per person working in agriculture), Asian farmers in the region now enjoy
support worth more than $60 billion per year or nearly $60 per person employed on
farms.
         The dispersion across Asian economies in nominal and relative rates of
assistance to farmers has increased rather than diminished despite the reforms in the
region. This result means there is still lots of scope for reducing distortions in the
region's use of resources in agriculture though more interantional re-location of
production, especially in rice. That finding also suggests there are political economy
forces at work in each country that do not change greatly relative to other countries
over time. In particular, the econometric results reported above suggest the NRA for


                                             24
                                                    25


agriculture and the RRA tend to rise with per capita income and to be higher the lower
a country's agricultural comparative advantage.
         The dispersion in nominal rates of assistance to farmers also has increased
rather than diminished within each studied Asian economy. This result means there is
still scope for reducing distortions in resource use within agriculture even in countries
with an average NRA for agriculture and an RRA close to zero. As in other regions,
the products in Asia with the highest rates of distortion and gross subsidy equivalent
values are rice, sugar and milk.
         In particular, the strong anti-trade bias in assistance rates within the farm
sector remains in place. The NRA for import-competing farm industries has increased
over the decades studied, while the negative NRA for agricultural exportables has
been phased down. The fact that the average NRAs for import-competing and
exportable agricultural industries have risen almost in parallel means that the trade
bias index has not fallen much from the high levels it rose to by the 1980s. This may
be understandable from a political economy viewpoint, but it nonetheless means that
resources are not allocated efficiently within the farm sector and ­ since openness
tends to promote economic growth (Spence et al. 2008) ­ that total factor productivity
growth in agriculture is slower than it would be if remaining interventions were
removed.
         The most important instruments of farm assistance/taxation continue to be
trade-restrictive measures. Domestic taxes and subsidies on farm inputs and outputs,
and non-product-specific assistance, have made only minor contributions to the
estimates of NRAs for Asia as a whole. True, input subsidies have played a significant
role in India and, occasionally, in some other parts of the region. But, as in other
regions such as Latin America (Lopez and Gallinato 2006), there has been
comparatively little assistance provided via public investments in rural infrastructure
and agricultural R&D 16 even though social rates of return from further such
investments remain very high (Fan and Hazell 2001, Fan 2008) which suggests they
could play a much bigger role in boosting farm output and productivity in the region.
         Movements in the consumer tax equivalent closely replicate changes in farm
support/taxation, because agricultural taxation or assistance is mostly due to trade

16
  Data in Pardey et al. (2006) suggest that public R&D expenditure in Asia since the late 1970s has
averaged less than 0.5 percent of the gross value of production at undistorted prices, which is trivial
compared with the NRA via price-distorting measures for Asia of 25 to 40 times that (12 percent in
2000-04 and below -20 percent prior to the mid-1980s).


                                                    25
                                            26


measures. This means that before the reforms food prices were kept artificially low
but, in recent years, they have been above international levels on average in Asia. It
also means there is considerable variation in consumer tax equivalents across products
and across countries in the region. The current level of taxation of food consumers for
the region as a whole is rising, and in 2000-04 it amounted to $11 per capita per year
(compared with a subsidy of $22 in 1980-84).
       The decline in negative relative rates of assistance has been due as much to
cuts in protection for non-agricultural sectors as to reforms of agricultural policies.
This underscores the fact that the reductions in distortions to agricultural incentives in
the region have been part of a series of economy-wide reform programs and not just
due to farm policy reforms.
       Food policies in continue to seek to reduce fluctuations in domestic food
prices and in the quantities available for consumption via fluctuations in barriers to
trade. This begger-thy-neighbor dimension of each economy's food policy reduces
hugely the international public good role that trade between nations can play in
bringing stability to the world's food markets. This is especially the case for rice,
because it is the main staple in Asia and because Asia accounts for five-sixths of the
global market for rice.




Where to from here?




The expectation is that, provided they remain open and continue to free up domestic
markets and practice good macroeconomic governance, Asia's developing economies
will keep growing rapidly in the foreseeable future, and the growth there will be more
rapid in manufacturing and service activities than in agriculture. In the more densely
populated economies of the region that growth will be accompanied by rapid
increases in per capita incomes of low-skilled workers where labor-intensive exports
boom. Agricultural comparative advantage is thus likely to decline in such economies.
Whether these economies become more dependent on imports of farm products
depends, however, on what happens to the RRA. The first wave of Asian
industrializers (Japan, and then Korea and Taiwan) chose to slow the growth of food
import dependence by raising their NRA for agriculture even as they were bringing


                                            26
                                                   27


down their NRA for non-farm tradables, such that their RRA became increasingly
above the neutral zero level. A key question is: will later industrializers follow suit,
given the past close association of RRAs with rising per capita income and falling
agricultural comparative advantage?
           When the RRAs for Japan, Korea and Taiwan are mapped against real per
capita income, it is possible to superimpose on that same graph the RRAs for lower-
income economies to see how they are tracking relative to the first industrializers.
Figure 1.15 does that for China and India, and shows that their RRA trends of the past
three decades are on the same trajectory as the richer Northeast Asians. That provides
reason to expect the governments of later industrializing economies to follow suit if
other things were equal.
           One reason one might expect different government behavior now is because
the earlier industrializers were not bound under GATT to keep down their agricultural
protection. Had there been strict discipline on farm trade measures at the time Japan
and Korea joined GATT in 1955 and 1967, respectively, their NRAs may have been
halted at less than 20 percent (figure 1.16). At the time of China's accession to WTO
in December 2001, its NRA was less than 5 percent according to this present study, or
7.3 percent for just import-competing agriculture. Its average bound import tariff
commitment was about twice that (16 percent in 2005), but what matters most is
China's out-of-quota bindings on the items whose imports are restricted by tariff rate
quotas. The latter tariff bindings as of 2005 were 65 percent for grains, 50 percent for
sugar and 40 percent for cotton (WTO, ITC and UNCTAD 2007, p. 60). China also
has bindings on farm product-specific domestic supports of 8.5 percent, and can
provide another 8.5 percent as non-product specific assistance if it so wishes ­ a total
17 percent NRA from domestic support measures alone, in addition to what is
available through out-of-quota tariff protection.
           Clearly the legal commitments China made on acceding to WTO are a long
way from current levels of domestic and border support for its farmers, and so are
unlikely to constrain the government very much in the next decade or so; 17 and the
legal constraints on Asia's developing countries that joined the WTO earlier (except
for Korea) are even less constraining. For India, Pakistan and Bangladesh, for
example, their estimated NRAs for agricultural importables in 2000-04 are 34, 4 and 6


17
     For more on this point, see Anderson, Martin and Valenzuela (2008).


                                                   27
                                                  28


percent, respectively, whereas the average bound tariffs on their agricultural imports
are 114, 96 and 189 percent, respectively (WTO, ITC and UNCTAD 2007). Also, like
other developing countries, they have high bindings on product-specific domestic
supports of 10 percent and another 10 percent for non-product specific assistance, a
total of 20 more percentage points of NRA that legally could come from domestic
support measures ­ compared with currently 10 percent in India and less than 3
percent in the rest of South Asia (tables 1.13 an 1.14).
        One can only hope that the China and South and Southeast Asia will not make
use of the legal wiggle room they have allowed themselves in their WTO bindings
and thereby follow Japan, Korea and Taiwan into high agricultural protection. 18 A
much more efficient and equitable strategy would be to instead treat agriculture in the
same way they have been treating non-farm tradable sectors. That would involve
opening the sector to international competition, and relying on more-efficient
domestic taxes (e.g., income and consumption or value-added taxes) rather than trade
taxes for raising government revenue.

        It might be argued that such a laissez faire strategy could increase rural-urban
inequality and poverty and thereby generate social unrest. On the other hand, policies
that lead to high prices for staple foods, in particular, involve potentially serious risks
for the urban and rural poor who are net buyers of food in developing countries, as has
been demonstrated by concerns about the recent increases in prices of these goods
(Ivanic and Martin 2008). Available evidence suggests that problems of rural-urban
poverty gaps have been alleviated in parts of Asia by some of the more-mobile
members of farm households finding full- or part-time work off the farm and
repatriating part of their higher earnings back to those remaining in farm households
(Otsuka and Yamano 2006, World Bank 2007). Concerted government intervention
through social policy measures are hugely important both in reducing the gaps
between rural and urban incomes, identified by Hayami (2007) as a concern, and in
raising national incomes overall (Winters, McCulloch and McKay 2004). Efficient
ways of assisting any left-behind groups of poor (nonfarm as well as farm) households

18
  The indications in the on-going Doha round of multilateral trade negotiations at the WTO are not
encouraging. The Group of 33 developing countries, led by Indonesia but strongly supported by India
and the Philippines, among others, is arguing for additional `special and differential treatment' for
developing countries in the form of exemptions from agricultural tariff cuts for so-called `special
products', and for a special safeguard mechanism that would allow such countries to impose even
higher than bound tariffs in years of likely import surges.


                                                  28
                                                  29


include public investment measures that have high social payoffs such as in basic
education and health and in rural infrastructure, as well as in agricultural research and
development. 19

         What do the above lessons and implications suggest developing country
policymakers should do when confronted, as in recent years, with a sharp upward
movement in international food prices? In the past, as illustrated for rice in figures
1.12 and 1.13, many governments have simply either increased their export
restrictions or lowered their import restrictions on food staples for the duration of the
spike. But what if this recent rise in international prices is much more prolonged than
the short-lived spikes of recent decades? This year's outlook projections by
international agencies are suggesting prices could remain high for the foreseeable
future, and that growth in net food imports by rapidly industrializing economies of
Asia is one of the significant contributors. 20 Yet as we saw in figure 1.8 above, China
and India over the past two or more decades have steadily raised their RRAs which
had been sufficient to keep both countries very close to self sufficient in primary
agricultural products over the previous four decades. In terms of all agricultural and
processed food trade though, in 2000-04 China for the first time became a net
importer while, in South Asia, India's net exports were less than Pakistan and
Bangladesh's net imports for the first time since the latter 1960s (Sandri, Valenzuela
and Anderson 2007). 21 Should these countries choose to keep their RRAs at current
(close to zero) levels, their import dependence in agriculture could well increase over
time. If so, other developing countries might well re-consider their current position in
the WTO's Doha round of trade negotiations: by agreeing to lower substantially their
bound tariffs and subsidies on agricultural products, they could extract greater



19
   As implied by the estimates reported in note 15 above, even if just one-twentieth of the current NRA
provided to Asian farmers via farm price-support policies was replaced by agricultural R&D
expenditure, that would more than double current public spending on such R&D ­ and the latter would
increase regional economic welfare whereas price-distortionary policies reduce it. Such a boost to
Asian R&D could well be able to generate another green revolution of the order of magnitude of the
first one that began in the 1960s, especially if it took full advantage of the new developments in
biotechnology (as shown for rice, for example, in Anderson, Jackson and Nielsen 2005).
20
   The World Bank's commodity forecast as of May 2008 for grain prices is that by 2020 in real terms
they will still be 10 percent above 2006 levels, which in turn were 20 percent above the average for
2001-05. IFPRI (von Braun 2007) and the OECD and FAO (2008) similarly expect food prices to
remain high well into next decade and beyond.
21
   This change for China was largely due to increases in imports of cotton needed to supply China's
surging production of textiles and clothing for export.


                                                  29
                                            30


`concessions' from high-income countries without having to reduce their actual
applied rates for the foreseeable future.

       We have said little in this chapter about the effects of the NRA and RRA
trends and fluctuations on economic welfare, price instability, income inequality or
poverty, nor about their underlying causes. The analytical narratives in the chapters
that follow touch to varying extents on those issues, but much more in-depth
empirical analysis can now be undertaken with the help of these assistance estimates.
Some will appear in the project's forthcoming books. Specifically, Anderson,
Valenzuela and van der Mensbrugghe (2009) provide results from a global economy-
wide model of the impacts on agricultural markets, national economic welfare and net
farm incomes of distortions to the world's goods markets as of 2004, using the new
agricultural distortion estimates in this volume and its companion volumes for the
other regions of the world. How those distortions ­ both own-country and rest-of
world's ­ impact on the extent of poverty and inequality are explored in a series of
country case studies brought together in Anderson, Cockburn and Martin (2009),
using national economy-wide models that are enhanced with detailed earning and
spending information of numerous types of urban and rural households. And in
Anderson (2009b) a broad range of theoretical and econometric analyses are brought
together in an attempt to shed more light on the political economy forces that
generated the evolving pattern of inter- and intra-sectoral distortions to farmer and
food consumer incentives over the past half-century. But our hope is that the results
from this study and its companion volumes will spawn many more such analyses in
the years to come.




                                            30
                                         31


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                                                                                 35



Table 1.1: Key economic and trade indicators, Asian focus economies, 2000­04
                       Share (%) of world:           National rel. to world (world=100)       Agric trade       Poverty               Gini index
                                                                                            specialization   incidencec   for per capita income
                                                                                                                                                d

                                                                                                    indexb

              Pop'n      Total   Agric    Agric          GDP      Ag land         RCAa                                        1984         2004
                         GDP     GDP     workers    per capita   per capita   ag & food
East Asia      29.09      8.38   24.76      47.1           29           45           75             -0.12            9        0.24         0.37
China          20.60      4.33   16.62      38.4           21           54           58             -0.05           10        0.20         0.36
Indonesia       3.41      0.59    2.62       3.8           17           27          173              0.08            4        0.30         0.35
Korea, Rep.     0.77      1.62    1.69       0.2          212             5          26             -0.78            0          na           na
Malaysia        0.39      0.28    0.73       0.1           74           41          107             -0.18            0        0.49         0.49
Philippines     1.27      0.22    0.91       1.0           18           19           67             -0.10           13        0.41         0.44
Taiwan          0.36      0.84    0.45       0.1          232             5          28             -0.72            0          na           na
Thailand        1.01      0.38    1.05       1.5           38           39          204              0.38            1        0.45         0.42
Vietnam         1.29      0.11    0.69       2.1             8          14          301              0.61            1        0.36         0.37
South Asia
               21.67     1.99    11.90       25.3           9           20            145            0.07           31        0.31         0.35
Bangladesh      2.16     0.14     0.90        2.9           7            8             93           -0.69           35        0.26         0.33
India          16.87     1.57     9.32       20.2           9           22            143            0.24           36        0.31         0.33
Pakistan        2.33     0.23     1.43        1.9          10           23            137              na           17        0.33         0.31
Sri Lanka       0.31     0.05     0.24        0.3          16           15            254            0.45            6        0.32         0.40
Asian focus    50.76    10.37    36.65       72.5          20           34             80           -0.15           19        0.27         0.36
economies
a
  Revealed comparative advantage index is the share of agriculture and processed food in national exports as a ratio of that sector's share of
global exports.
b
  Primary agricultural trade specialization index is net exports as a ratio of the sum of exports and imports of agricultural and processed food
products (world average =0.0).
c
  Percentage of the population living on less than US $1 per day.




                                                                                 35
                                                                      36



d
  The poverty incidence and the 2004 Gini index are for the most recent year available between 2000 and 2004. The 1984 Gini coefficients are
for the year nearest 1984, from the World Bank's Povcal website. The weighted averages for the focus economies use population as the basis for
weights.
Source: Sandri, Valenzuela and Anderson (2007), compiled mainly from World Bank's World Development Indicators.




                                                                      36
                                        37


Table 1.2: Changes in poverty in Asia, 1981 to 2004

                               1981          1987     1993   1999   2004
No. of people (million):
China                           634          310       334    223    128
Other East Asia                 162          119        86     53     41

India                           364          369      376    376     371
Other South Asia                 91          102       61     87      75

TOTAL, Asia                    1251           900      857    740    615

% of population
East Asia                        58           28       25     15      9
South Asia                       50           45       37     35     31



Source: Chen and Ravallion (2007)




                                        37
                                              38


Table 1.3: Growth of real GDP and exports, Asian focus economies, 1980 to 2004

                 (at constant 2000 prices, percent per year, trend-based)

                     Agriculture   Industry        Services   Total GDP   GDP per     Export
                                                                            capita   volumea
East Asia                   3.1        9.0             7.9          7.6       6.3       13.7
China                       4.4       12.1            11.3          9.9       8.6       15.1
Indonesia                   2.9        6.6             5.3          5.4        3.7      10.4
Korea, Rep.                 1.3        8.2             7.2          7.1       6.1       10.6
Malaysia                    1.7        7.8             6.9          6.6       3.9       10.3
Philippines                 1.7        2.0             3.5          2.7       0.4       12.8
Taiwan                      0.5        5.3             8.3          6.7        5.6      17.0
Thailand                    2.4        8.5             5.8          6.3        4.9      17.3
Vietnam                     3.9        9.7             7.5          7.0       5.1        n.a.
South Asia                  3.0        6.2             6.4          5.4       3.4        n.a.
Bangladesh                  2.7        6.6             4.4          4.4       2.1       13.4
India                       3.0        6.3             7.0          5.7       3.7        n.a.
Pakistan                    4.0        5.5             4.8          4.7        2.1        9.8
Sri Lanka                   1.8        5.6             5.1          4.5        3.3        6.3
Asian focus                 3.1        8.6              7.5         7.1        5.5       n.a.
economies
WORLD                       2.0        2.5              3.2         3.0        1.4       n.a.

a
    1985-95, from World Bank's World Development Indicators 2008, Table 6.2.

Source: Sandri, Valenzuela and Anderson (2007), compiled from World Bank's
World Development Indicators.




                                              38
                                           39


Table 1.4: Exports of goods and services as a share of GDP, Asian focus economies,
1965 to 2004

                                        (percent)

                  1965-69b   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
             a
    East Asia           8        19        22        25       28         34        39
    China               3         6        11        14       22         21        28
    Indonesia          10        23        25        23       26         32        35
    Korea, Rep.        13        32        34        35       27         33        39
    Malaysia           37        49        53        63       82        103       117
    Philippines        11        20        21        25       28         47        53
    Taiwan             22        49        53        54       45         48        59
    Thailand           18        21        23        30       38         49        68
    Vietnam            na        na        na        na       na         44        55
    South Asia         na         7         7         7       11         12        14
    Bangladesh         na         5         5         6        8         13        15
    India               3         6         6         6        9         11        13
    Pakistan           na        12        12        14       17         16        16
    Sri Lanka
                       19        24        29        26        32        36        37
    Asian focus
    economiesa         na        16        19        22        25        30        34
a
  Ignores Vietnam in the period 1980 to 1994, whose weight in Asian GDP was less
than 1 percent.
b
 For 1965-69, merchandise exports only except for Taiwan. In 1960-64, Korea and
Taiwan's shares were 6 and 15 percent respectively, and in 1955-59 Taiwan's share
was 10 percent.

Source: Sandri, Valenzuela and Anderson (2007), compiled from World Bank's
World Development Indicators.




                                           39
                                          40


Table 1.5: Share of world exports of non-food manufactures, Asian focus economies,
1990 to 2006

                                     (percent)

                  1990-94      1995-99         2000-04       2006      Current
                                                                       value in
                                                                     2006 as %
                                                                       of 1990
 East Asia             5.1         10.3           15.6        20.4         790
 China                 1.0          2.4            6.1        10.8        2020
 Indonesia             0.1          0.5            0.6         0.5         490
 Korea, Rep.           1.7          2.6            3.1         3.5         480
 Malaysia              0.2          1.0            1.5         1.4         750
 Philippines           0.1          0.2            0.6         0.5         730
 Taiwan                1.8          2.7            2.5         2.3         310
 Thailand              0.2          0.8            1.0         1.2         670
 Vietnam               0.0          0.1            0.2         0.2           na
 South Asia            0.6          0.9            1.1         1.4         470
 Bangladesh            0.0          0.1            0.1         0.1         800
 India                 0.4          0.5            0.7         1.0         550
 Pakistan              0.1          0.2            0.2         0.2         310
 Sri Lanka                                                     0.1         480
                       0.0          0.1            0.1
 Asian focus
 economies             5.7         11.2           16.7        21.8         760


Source: Sandri, Valenzuela and Anderson (2007), compiled from World Bank's
World Development Indicators, updated from the WTO's, International Trade
Statistics 2007.




                                          40
                                            41


Table 1.6: Sectoral shares of GDP, Asian focus economies, 1965 to 2004

                                        (percent)

                       Agriculture                   Industry                    Services
                1965   1975   1985   2000   1965    1975   1985   2000   1965   1975   1985   2000
                 ­69    ­79    ­89    ­04    ­69     ­79    ­89    ­04    ­69    ­79    ­89    ­04
East Asiaa       34     26     19     10     29      40     40     42     34     32     41     48
China            39     31     27     14     35      47     44     46     26     22     30     41
Indonesia        49     29     23     16     16      35     36     45     35     36     41     40
Korea, Rep.      30     21     10      4     22      30     37     35     48     49     53     61
Malaysia         29     26     20      9     27      37     39     49     44     37     42     42
Philippines      27     29     24     14     27      36     35     32     46     35     42     53
Taiwan           20     10      5      2     34      44     45     31     47     46     50     67
Thailand         30     25     16     10     24      29     34     43     46     46     50     48
Vietnam          na     na     41     23     na      na     27     39     na     na     32     38
South Asia       43     36     29     21     18      21     23     24     39     42     48     55
Bangladesh       54     55     31     22      9      14     21     25     36     31     48     52
India            44     36     29     21     19      22     24     24     38     43     47     55
Pakistan         35     29     24     22     19      21     21     22     46     50     55     56
Sri Lanka
                 29     28     24     17     21      26     24     24     51     46     51     59
Asian focus
economiesa       36     28     22     12     27      36     35     38     35     34     43     49
a
 Ignores Vietnam in the periods 1965-69 and 1975-79, whose weight in Asian GDP
was less than 1 percent.

Source: Sandri, Valenzuela and Anderson (2007), compiled from World Bank's
World Development Indicators.




                                            41
                                        42


Table 1.7: Agriculture's shares of employment, Asian focus economies, 1965 to 2004

                                     (percent)

                       1965­69         1975­79        1985­89        2000­04
East Asia                   77              72             68             60
China                       79              75             73             66
Indonesia                   69              60             56             47
Korea, Rep.                 53              41             24              9
Malaysia                    57              45             31             18
Philippines                 60              54             48             39
Taiwan                      45              25             15              7
Thailand                    81              74             66             55
Vietnam                     79              74             72             67
South Asia                  74              70             65             57
Bangladesh                  85              76             67             54
India                       73              70             66             59
Pakistan                    65              64             55             46
Sri Lanka                   55              53             49             45
Asian focus                  76              71             67             59
economies

Source: Sandri, Valenzuela and Anderson (2007), compiled from FAOSTAT.




                                        42
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Table 1.8: Sectoral shares of merchandise exports, Asian focus economies, 1965 to
2004

                                          (percent)

              Agriculture and processed           Other primary                 Other goods
                        food
              1965   1975   1985   2000    1965    1975   1985    2000   1965   1975   1985   2000
               ­69    ­79    ­89    ­04     ­69     ­79    ­89     ­04    ­69    ­79    ­89    ­04
East Asia      46     30     18       7     10      16     12       7     43      53    62     85
China          51     35     19       5      5      17     14       4     44      48    53     90
Indonesia      49     26     21      15     48      72     55      29      2       2    24     55
Korea, Rep.    21     11      5       2      9       2      2       6     70      87    92     92
Malaysia       61     55     36      10     32      27     24      11      5      17    40     78
Philippines    78     55     27       6     16      17     11       3      7      18    32     83
Taiwan         39     13      6       3      2       2      2       3     59      85    92     94
Thailand       79     67     46      18     14      10      3       4      4      20    50     75
Vietnam        na     na     na      27     na      na     na      23     na      na    na     48
South Asia     42     40     26      13      9       8      7       8     49      52    66     78
Bangladesh     na     37     28       8     na       1      1       0     na      61    71     91
India          38     35     22      13     11       9      9      11     50      55    67     75
Pakistan       53     38     30      12      2       5      1       2     45      57    68     85
Sri Lanka
               96     79     47      23      2        8     5       2      1       9    46     75

Asian focus
economies      45     32     18       7     10      14     12       7     44      53    62     85

a
 Ignores Vietnam in the period 1985-89, whose weight in Asian merchandise trade
was less than 1 percent.

Source: Sandri, Valenzuela and Anderson (2007), compiled from World Bank's
World Development Indicators.




                                             43
                                           44


Table 1.9: Indexes of comparative advantage in agriculture and processed food,a
Asian focus economies, 1965 to 2004
(a) Revealed comparative advantage index,a world = 1.0
                             1965­69        1975­79         1985­89        2000­04
 East Asia                         2.2            2.2            1.1            0.7
 China                             2.1            2.1            1.3            0.6
 Indonesia                         2.0            1.3            1.4            1.7
 Korea, Rep.                       0.8            0.6            0.3            0.3
 Malaysia                          2.4            2.9            2.4            1.1
 Philippines                       3.1            2.8            1.9            0.7
 Taiwan                            1.5            0.6            0.4            0.3
 Thailand                          3.1            3.5            3.1            2.0
 Vietnam                            na             na             na            3.0
 South Asia                          1.9             2.0             1.8             1.4
 Bangladesh                           na             1.9             1.9             0.9
 India                               1.5             1.8             1.5             1.4
 Pakistan                            2.1             1.9             2.1             1.4
 Sri Lanka                           3.8             4.1             3.2             2.5
 Asian focus
 economies                           2.2             2.2             1.2             0.8

(b) Trade specialization index,b world = 0.0

                               1965­69          1975­79        1985­89         2000­04
  East Asia                          na               na             na           -0.03
  China                              na               na           0.07           -0.16
  Indonesia                        0.48             0.42           0.43            0.16
  Korea, Rep.                     -0.63            -0.41          -0.45           -0.53
  Malaysia                         0.44             0.60           0.56            0.29
  Philippines                      0.47             0.51           0.25           -0.18
  Taiwan                           0.08                           -0.27           -0.35
  Thailand                         0.68             0.69           0.57            0.44
  Vietnam                            na              na             na             0.44
  South Asia                         na             0.05           0.03           -0.06
  Bangladesh                         na           -0.37           -0.46           -0.62
  India                           -0.18             0.13           0.16            0.10
  Pakistan                         0.20           -0.13           -0.05           -0.24
  Sri Lanka                        0.34             0.30           0.21            0.08
  Asian focus
  economies                          na               na             na            -0.03
a
  Share of agriculture and processed food in national exports as a ratio of that sector's
share of global merchandise exports.
b
  Net exports as a ratio of the sum of exports and imports of agricultural and
processed food products.
Source: Sandri, Valenzuela and Anderson (2007), compiled from World Bank's
World Development Indicators.




                                           44
                                                   45


Table 1.10: Export orientation, import dependence and self-sufficiency in primary
agricultural production, Asian focus economies, 1961 to 2004

                                     (percent at undistorted prices)
(a) Exports as share of production

                1961-64   1965-69     1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
 Korea               0         0           0         0         0         0         0         2         1
 Taiwan              5         9          13        14        10        10         6         5         6
 China               2         2           2         3         5         5         7         7         7
 Indonesia           -         -           6         5         5         6         4         5         4
 Malaysia           70        64          54        41        35        34        19        12         9
 Philippines        13        11          14         8         7         2         1         1         1
 Thailand            -         -          13        20        24        26        25        25        30
 Vietnam             -         -           -         -         -         3         4         9        11
 Bangladesh          -         -           -         3         3         3         2         1         1
 India               1         1           1         1         1         1         1         1         2
 Pakistan            7         5           5         2         5         8         4         2         1
 Sri Lanka          68        62          44        52        36        34        24        31        39
Asian focus
economiesc           3         4           4         4         4         6         6         5         5

(b) Imports as share of apparent consumption

                1961-64   1965-69     1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
 Korea               4         5          12         8        11         9        11        11        13
 Taiwan             24        33          56        66        76        81        86        90        93
 China               2         2           2         3         5         5         7         7         7
 Indonesia           -         -           0         1         1         1         1         2         2
 Malaysia           13         6           3         1         1         1         2         3         6
 Philippines         0         0           1         0         1         0         0         2         1
 Thailand            -         -           0         0         0         0         0         2         5
 Vietnam             -         -           -         -         -         0         0         0         0
 Bangladesh          -         -           -         3         4         5         3         3         5
 India               3         4           2         2         1         1         1         1         2
 Pakistan            6         5           3         5         2         5         5         6         4
 Sri Lanka           7         5           1         0         1         4         1         3         5
Asian focus
economiesc           3         4           4         5         7        12        17        17        19




                                                   45
                                                    46


Table 1.10 (continued): Export orientation, import dependence and self-sufficiency in
primary agricultural production, Asian focus economies, 1961 to 2004


(c) Self-sufficiency ratio

                 1961-64     1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
 Korea               96         95        88        92        89        91        90        91        87
 Taiwan              80         73        51        40        27        21        15        11         7
 China               99        101       100        99        98       101       101        99        98
 Indonesia            -          -       106       105       104       106       104       103       102
 Malaysia           293        265       215       167       152       150       122       110       104
 Philippines        115        112       116       108       106       101       101        99        99
 Thailand             -          -       115       125       131       135       133       130       137
 Vietnam              -          -         -         -         -       103       104       110       112
 Bangladesh           -          -        98        99        99        98        99        98        96
 India               98         97        99        99        99        99       100       100       100
 Pakistan           101        100       102        97       103       104        99        96        97
 Sri Lanka          297        298       194       221       155       144       131       142       157
Asian focus
economiesc          100        100       100         99        97        94        88        87        85

Source: Compiled using the project's estimates of total agricultural production (both covered and non-
covered products) valued at undistorted prices, plus the FAO's total agricultural trade value data, with
self-sufficiency defined for each product as the ratio of production to production plus imports minus
exports.




                                                    46
                                                        47


Table 1.11: Nominal rates of assistance to agriculture,a Asian focus economies, 1955 to 2004c
                                           (percent)
                      1955-59     1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
    Northeast Asia      -42.8      -42.6     -41.7     -41.2     -39.5     -38.2     -25.7      -1.7      14.4      11.9
       Korea             -3.2        4.0      13.4      35.7      56.3      89.4     126.1     152.8     129.8     137.3
       Taiwan c         -12.0        3.6       3.0       9.3       7.1      14.9      27.1      38.1      46.4      61.3
       China d          -45.2      -45.2     -45.2     -45.2     -45.2     -45.2     -35.5     -14.3       6.6       5.9
    Southeast Asia        na        -6.8       5.9      -8.8       0.0       4.6      -0.4      -4.2       0.0      11.1
       Indonesia           na         na        na      -2.6       9.3       9.2      -1.7      -6.6      -8.6      12.0
       Malaysia            na       -7.2      -7.5      -9.0     -13.0      -4.6       1.3       2.3      -0.2       1.2
       Philippines         na       -5.3      14.4      -5.1      -7.1      -1.0      18.7      18.5      32.9      22.0
       Thailand            na         na        na     -20.3     -14.0      -2.0      -6.2      -5.7       1.7      -0.2
       Vietnamc            na         na        na        na        na        na     -13.9     -25.4       0.6      21.2
    South Asia            0.0       -0.5       0.6       0.4      -5.5       0.6      20.9       0.7       0.2      13.6
       Bangladesh          na         na        na     -16.0       1.4      -3.3      11.7      -1.5      -5.2       2.7
       India d            0.1        0.1       0.1       0.2      -5.6       1.9      24.9       1.8       0.7      15.8
       Pakistan c          na       -0.7      15.3       6.8      -8.5      -6.4      -4.0      -6.9      -1.6       1.2
       Sri Lanka         -2.3      -22.8     -24.5     -16.3     -25.5     -13.5      -9.9      -1.2      12.2       9.5
    Asian focus economies:
    Unweighted
    averageb            -12.3      -10.2      -3.9      -4.7      -4.1       3.2      11.5      12.1      16.8      21.7
    Weighted.
    averagea            -27.3      -26.7     -25.1     -25.3     -23.8     -20.6      -9.0      -2.0       7.5      12.0
    Dispersion of
    individual
    country NRAs e      25.3        25.2      31.2      29.9      32.5      39.9      43.8      47.5      36.6      38.0
    Product
    coverage f               52       65        63        64        68        74        78        75        73        66

a
  Weighted average for each country, including product-specific input distortions and non-
product specific assistance as well as authors' guesstimates for non-covered farm products,
with weights based on gross value of agricultural production at undistorted prices.
b
  The unweighted average is the simple average across the twelve economies of their national
NRA (weighted) averages.
c
  Pakistan data for 1960-64 is 1961-64; Vietnam data for 1985-89 is 1986-1989; Taiwan data
for 2000-04 is 2000-03.
d
  Estimates for China pre-1981 and India pre-1965 are based on the assumption that the
nominal rates of assistance to agriculture in those years was the same as the average NRA
estimates for those economies for 1981-84 and 1965-69, respectively, and that the gross value
of production in those missing years is that which gives the same average share of value of
production in total world production in 1981-84 and 1965-69, respectively. This NRA
assumption is conservative in the sense that for both countries the average NRA was probably
even lower in earlier years.
e
  Dispersion is a simple 5-year average of the annual standard deviation around a weighted mean of
the national agricultural sector NRAs each year.
f
  Weighted average share of gross value of total agricultural production at undistorted prices
accounted for by covered products.

Source: Anderson and Valenzuela (2008), drawn from estimates reported in Chapters 2-12 of this
book.



                                                        47
                                                       48


Table 1.12: Dispersion of nominal rates of assistance across covered agricultural products,a
Asian focus economies, 1955 to 2004
                                          (percent)

                       1955-59   1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
                  c
    Northeast Asia       38.5      38.5      66.8      61.7      68.6      64.0      67.1      80.5     102.3     116.6
       Korea             34.1      40.5      85.0      82.5      89.0      80.1     114.8     164.2     200.1     225.4
       Taiwan b          42.8      36.4      48.7      40.9      48.2      37.5      34.3      56.5      88.4     109.0
       China               na        na        na        na        na      74.3      52.3      20.7      18.4      15.3
    Southeast Asiac       na       21.1      30.4      23.9      32.7      46.2      47.9      42.5      39.7      40.4
       Indonesia           na        na        na      29.1      49.4      53.6      35.0      40.5      49.0      33.3
       Malaysia            na      19.8      10.6      11.0      34.8      58.6      90.5      71.9      33.7      40.1
       Philippines         na      22.5      50.2      28.3      24.2      42.7      50.9      30.1      40.6      37.6
       Thailand            na        na        na      27.5      22.4      30.1      29.3      25.1      22.9      16.7
       Vietnamb            na        na        na        na        na        na      33.6      44.7      52.4      74.3
    South Asiac          44.2      46.3      64.9      51.8      55.2      51.5      86.2      55.4      45.0      58.7
       Bangladesh          na        na        na        na      71.4      67.6     190.7      77.5      67.9     101.2
       India               na      35.5      68.0      45.8      49.8      39.2      46.9      28.5      19.4      21.5
       Pakistan b          na      74.6     105.8      77.6      45.0      52.2      69.4      34.4      29.4      43.1
       Sri Lanka         44.2      28.7      20.9      31.9      54.6      46.9      37.9      81.3      63.3      69.1
    Asian focus economies:
    Unweighted
    averagec             39.0      36.8      55.5      41.5      48.0      51.1      66.9      55.9      55.6      64.4

a
  Dispersion for each country is a simple 5-year average of the annual standard deviation
around a weighted mean of NRAs across covered products each year.
b
  Pakistan data for 1960-64 is 1961-64; Vietnam data for 1985-89 is 1986-1989; Taiwan data
for 2000-04 is 2000-03.
c
  The unweighted average is the simple average across the relevant economies of their 5-year
simple average dispersion measures.

Source: Anderson and Valenzuela (2008), drawn from estimates reported in Chapters 2-12 of
this book.




                                                       48
                                                     49


Table 1.13: Nominal rates of assistance to agricultural exportables, import-competing
products, and the trade bias index,a Asian focus economies, 1955 to 2004
                                            (percent)
                      1955-59   1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04

  Korea
NRA agric. exp            na        na        na        na        na       na        na        na        na        na
NRA agric. imp-comp     -3.3       4.9      16.3      46.1      71.8    118.6     159.8     197.6     164.8     171.9
Trade Bias Index        0.03     -0.05     -0.14     -0.32     -0.42    -0.54     -0.62     -0.66     -0.62     -0.63
Exportables' shareb        0         0         0         0         0        0         0         0         0         0
  Taiwan c
NRA agric. exp         -18.1       5.7       4.3      15.4      10.3      25.1      48.9      57.1      57.0      70.3
NRA agric. imp-comp     -3.6       0.5       2.3       3.3       5.2       9.2      18.1      42.0      54.3      71.3
Trade Bias Index       -0.15      0.05      0.02      0.12      0.05      0.15      0.27      0.11      0.02      0.00
Exportables' shareb       85        80        78        74        70        61        47        28        25        24
  China
NRA agric. exp            na        na        na        na        na     -56.9     -46.0     -21.8      -0.8      -0.1
NRA agric. imp-comp       na        na        na        na        na     -11.0      20.4       2.2      17.0       7.3
Trade Bias Index          na        na        na        na        na     -0.50     -0.55     -0.23     -0.15     -0.07
Exportables' shareb       na        na        na        na        na        79        88        80        75        72
 Northeast Asia
NRA agric. exp         -18.1       5.7       4.3      15.4      10.3     -40.0     -44.2     -20.5      -0.2       0.2
NRA agric. imp-comp     -3.4       3.9      14.4      38.3      59.7      21.2      51.8      42.8      40.5      26.4
Trade Bias Index       -0.15      0.02     -0.09     -0.17     -0.31     -0.50     -0.63     -0.44     -0.29     -0.21
Exportables' shareb       35        31        32        29        29        76        83        74        70        69

  Indonesia
NRA agric. exp            na        na        na      -3.3      -0.3      -7.0     -16.5     -24.6     -17.2      -3.3
NRA agric. imp-comp       na        na        na      -1.3      16.5      19.5       5.1      -0.7      -5.8      24.7
Trade Bias Index          na        na        na      0.01     -0.14     -0.21     -0.20     -0.24     -0.12     -0.22
Exportables' shareb       na        na        na        57        37        34        32        29        34        37
   Malaysia
NRA agric. exp            na     -11.4      -9.0     -12.7     -18.7     -11.8      -5.0      -4.1      -3.0      -1.3
NRA agric. imp-comp       na      13.0      -1.8       2.5      21.6      36.7      44.1      33.2      10.8      12.3
Trade Bias Index          na     -0.22     -0.06     -0.14     -0.31     -0.35     -0.33     -0.28     -0.12     -0.12
Exportables' shareb       na        84        79        78        86        86        86        82        80        81
   Philippines
NRA agric. exp            na      -6.2      35.4     -10.2      -9.9      -3.8       6.2       4.8      -0.7      -3.7
NRA agric. imp-comp       na      -5.3      10.1      -2.7      -6.1       0.6      30.0      27.6      47.9      30.8
Trade Bias Index          na      0.00      0.23     -0.04     -0.04     -0.04     -0.18     -0.17     -0.32     -0.25
Exportables' shareb       na        21        22        30        41        41        39        33        25        22
   Thailand
NRA agric. exp            na        na        na     -26.7     -19.4     -11.1     -11.7      -9.2      -3.8      -0.6
NRA agric. imp-comp       na        na        na      -4.8       1.9      45.3      22.0       6.4      34.4       4.7
Trade Bias Index          na        na        na     -0.18     -0.20     -0.37     -0.24     -0.14     -0.27     -0.03
Exportables' shareb       na        na        na        83        83        84        84        81        85        86
   Vietnam c
NRA agric. exp            na        na        na        na        na        na     -17.5     -27.1      -2.0      17.7
NRA agric. imp-comp       na        na        na        na        na        na      37.1      25.8      65.4      67.3
Trade Bias Index          na        na        na        na        na        na     -0.37     -0.42     -0.40     -0.29
Exportables' shareb       na        na        na        na        na        na        98        96        96        94
  Southeast Asia
NRA agric. exp            na     -10.8       4.4     -13.9     -10.8      -8.7     -11.0     -14.9      -7.6       1.0
NRA agric. imp-comp       na       4.5       8.2      -2.7      11.1      18.4      10.6       5.8       8.0      24.9
Trade Bias Index          na     -0.15     -0.03     -0.12     -0.20     -0.23     -0.19     -0.20     -0.14     -0.19
Exportables' shareb       na       57        44        61        51        48        51        48        51        53




                                                     49
                                                        50


Table 1.13 (continued)
                          1955-59   1960-64   1965-69        1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04

   Bangladesh
NRA agric. exp                na        na        na             na     -34.6     -26.2     -32.4     -33.0      -9.9     -33.2
NRA agric. imp-comp           na        na        na             na       6.5      -1.9      24.4      -0.1      -7.9       6.0
Trade Bias Index              na        na        na             na     -0.30     -0.23     -0.45     -0.33      0.00     -0.37
Exportables' shareb           na        na        na             na        13         9         7        11         7         5
   India
NRA agric. exp                na        na     -37.4          -22.3     -35.9     -27.8      -6.0     -15.3     -12.4      -6.4
NRA agric. imp-comp           na        na      41.7           52.7      74.5      58.8      81.4      38.3      22.5      34.2
Trade Bias Index              na        na     -0.55          -0.50     -0.63     -0.54     -0.47     -0.38     -0.28     -0.30
Exportables' shareb           na        na        58             74        73        63        43        70        71        51
    Pakistan c
NRA agric. exp                na     -33.3     -35.3          -20.1     -33.5     -29.1     -32.1     -16.7      -4.4      -5.6
NRA agric. imp-comp           na       1.8      45.0           19.2      -4.3      -1.9       5.4      -7.9      -1.9       3.7
Trade Bias Index              na     -0.38     -0.55          -0.27     -0.31     -0.28     -0.35     -0.10     -0.02     -0.08
Exportables' shareb           na        31        29             24        25        27        30        24        21        22
    Sri Lanka
NRA agric. exp             -22.8     -40.0     -38.6          -41.1     -45.2     -31.1     -21.4     -24.2      -2.0       5.9
NRA agric. imp-comp         62.5      11.9      -5.9            9.0      -3.7      -0.6      -2.1      22.4      31.8      12.8
Trade Bias Index           -0.52     -0.45     -0.35          -0.45     -0.43     -0.31     -0.18     -0.38     -0.25     -0.05
Exportables' shareb           76        72        68             50        62        58        52        51        58        58
  South Asia
NRA agric. exp             -22.8     -37.7     -37.2          -30.0     -36.1     -27.9     -20.6     -15.8     -12.0      -6.2
NRA agric. imp-comp         62.5      24.7      41.2           39.4      45.1      37.9      63.3      25.1      14.5      26.5
Trade Bias Index           -0.52     -0.50     -0.56          -0.50     -0.56     -0.48     -0.51     -0.33     -0.23     -0.26
Exportables' shareb           76        27        53             61        63        56        32        63        64        46
   All Asian focus economies (unweighted average)d
NRA agric. exp            -20.4   -16.3   -12.5   -15.5                 -20.8     -17.3     -12.5     -10.4       0.1       0.9
NRA agric. imp-comp        18.9     6.8    15.2    13.2                  17.7      24.6      36.4      31.4      34.5      34.5
Trade Bias Index          -0.33   -0.22   -0.24   -0.25                 -0.33     -0.34     -0.36     -0.32     -0.26     -0.25
   All Asian focus economies (weighted average)d
NRA agric. exp            -20.2   -12.6   -27.2   -20.7                 -25.4     -41.7     -38.1     -19.1      -4.3      -0.6
NRA agric. imp-comp         5.9     4.7    33.9    26.6                  31.3      20.8      43.8      25.8      24.8      25.4
Trade Bias Index          -0.25   -0.17   -0.46   -0.37                 -0.43     -0.52     -0.57     -0.36     -0.23     -0.21
Exportables' shareb           47        37        50             58        55        65        69        66        65        63

a
  Trade Bias Index, TBI = (1+NRAagx/100)/(1+NRAagm/100) ­ 1, where NRAagx and
NRAagm are the average percentage NRAs for the exportable and import-competing parts of
the agricultural sector.
b
  Export share is the exportables' share of the gross value of production at undistorted prices
of all agricultural tradables, with weighted averages shown for sub-regions.
c
  Pakistan data for 1960-64 is 1961-64; Vietnam data for 1985-89 is 1986-89; Taiwan data for
2000-04 is 2000-03.
d
  Regional averages of the trade bias index are calculated from the regional averages of the
NRAs for exportable and import-competing parts of the agricultural sector.

Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                                        50
                                                      51


Table 1.14: Nominal rates of assistance for covered farm products, by policy instrument,
Asian focus economies, 1965 to 2004
                                          (percent)
                      1955-59   1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
  Korea
 NRA, agric. inputs       0.0       0.0      0.0       0.0       0.0       0.0       0.0       0.0       0.0       0.0
 NRA, domestic MSc       -0.2      -0.4      0.9       4.2       7.1       5.3       5.5       5.9       6.1       5.2
 NRA, border MSc         -3.7       4.7     15.7      43.4      66.7     117.5     161.2     196.0     176.9     208.5
 NRA, agric. total       -3.9       4.4     16.6      47.6      73.8     122.8     166.7     201.9     182.9     213.6
  Taiwan
 NRA, agric. inputs       0.0       0.0       0.0      0.0       0.0       0.0       0.0       0.0       0.0       0.0
 NRA, domestic MSc        0.0       0.0       0.0      0.0       0.0       0.0       0.0       0.0       0.0       0.0
 NRA, border MSc        -23.6       7.3       6.3     20.4      14.4      36.9      82.4     117.4     142.2     178.4
 NRA, agric. total      -23.6       7.3       6.3     20.4      14.4      36.9      82.4     117.4     142.2     178.4
  China
 NRA, agric. inputs       na        na        na        na        na        0.3       0.3       0.2       0.7       0.5
 NRA, domestic MSc        na        na        na        na        na      -12.6      -6.3      -6.2      -1.1      -1.4
 NRA, border MSc          na        na        na        na        na      -38.5     -34.6     -12.9       2.7       1.8
 NRA, agric. total        na        na        na        na        na      -50.8     -40.6     -18.9       2.3       0.9
  Northeast Asia
 NRA, agric. inputs       0.0       0.0      0.0       0.0       0.0        0.2       0.3       0.2      0.7        0.5
 NRA, domestic MSc       -0.1      -0.2      0.6       2.6       4.6       -8.4      -5.8      -5.5     -0.8       -1.2
 NRA, border MSc        -12.1       5.7     12.3      34.9      48.3      -11.4     -26.6      -1.5     10.9        9.0
 NRA, agric. total      -12.3       5.5     12.9      37.5      53.0      -19.6     -32.2      -6.8     10.7        8.3
  Indonesia
 NRA, agric. inputs       na        na        na        6.0      6.8       7.3        6.0       3.2       2.6      2.3
 NRA, domestic MSc        na        na        na        0.0      0.0       0.0        0.0       0.0       0.0      0.0
 NRA, border MSc          na        na        na       -8.7      4.3       4.8       -6.3      -8.8     -11.7     13.3
 NRA, agric. total        na        na        na       -2.7     11.1      12.2       -0.3      -5.5      -9.1     15.6
  Malaysia
 NRA, agric. inputs       na        0.0       0.0       0.0       0.0       0.0       0.0       0.0       0.0       0.0
 NRA, domestic MSc        na       -9.0      -8.1     -10.2     -17.0      -6.9       0.4       2.5      -0.1       1.5
 NRA, border MSc          na        0.6      -0.6      -0.3       1.8       1.3       1.3       1.0      -0.3       0.6
 NRA, agric. total        na       -8.4      -8.7     -10.5     -15.3      -5.7       1.8       3.4      -0.3       2.1
  Philippines
 NRA, agric. inputs       na        0.0      0.0        0.0       0.0       0.0      0.0       0.0       0.0       0.0
 NRA, domestic MSc        na        0.0      0.0        0.0       0.0       0.0      0.0       0.0       0.0       0.0
 NRA, border MSc          na       -6.7     16.7       -6.0      -8.7      -1.6     21.9      21.4      37.8      24.9
 NRA, agric. total        na       -6.7     16.7       -6.0      -8.7      -1.6     21.9      21.4      37.8      24.9
  Thailand
 NRA, agric. inputs       na        na        na       -1.3      -1.2      -1.1      -2.7      -1.8      -1.4      -0.8
 NRA, domestic MSc        na        na        na        0.0       0.0       0.0       0.0       0.0       0.0       0.0
 NRA, border MSc          na        na        na      -24.5     -17.2      -7.3      -7.0      -5.9       0.3       0.2
 NRA, agric. total        na        na        na      -25.8     -18.4      -8.4      -9.7      -7.7      -1.1      -0.6
  Vietnam
 NRA, agric. inputs       na        na        na        na        na        na        0.0       0.0       0.0      0.0
 NRA, domestic MSc        na        na        na        na        na        na       -0.7      -0.9       0.0      1.7
 NRA, border MSc          na        na        na        na        na        na      -12.6     -24.6       0.6     19.0
 NRA, agric. total        na        na        na        na        na        na      -13.3     -25.4       0.7     20.6
  Southeast Asia
 NRA, agric. inputs       na        0.0       0.0       2.1       3.5       4.0       2.7       1.3       1.0      0.9
 NRA, domestic MSc        na       -6.3      -3.3      -1.4      -2.1      -0.9       0.0       0.1       0.0      0.4
 NRA, border MSc          na       -1.8       9.6     -11.2      -2.1       1.5      -2.2      -4.5      -0.1     11.9
 NRA, agric. total        na       -8.1       6.4     -10.5      -0.6       4.7       0.5      -3.0       0.9     13.1



                                                      51
                                                           52


    Table 1.14 (continued): Nominal rates of assistance for covered farm products, by policy
    instrument, Asian focus economies, 1965 to 2004
                                              (percent)
                        1955-59      1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
     Bangladesh
    NRA, agric. inputs         na        na        na        na        1.1       1.2      1.2        1.5       2.2       2.6
    NRA, domestic MSc          na        na        na        na        0.0       0.0      0.0        0.0       0.0       0.0
    NRA, border MSc            na        na        na        na        1.7      -4.9     15.5       -3.7      -9.8       1.3
    NRA, agric. total          na        na        na        na        2.8      -3.8     16.8       -2.2      -7.6       3.9
     India
    NRA, agric. inputs         na        na        0.0       0.0       0.0       0.7      4.4        5.7       7.2      9.5
    NRA, domestic MSc          na        na       18.1      17.8       3.7       2.1      4.3        3.4      -0.1      0.2
    NRA, border MSc            na        na      -17.9     -17.7      -9.3      -0.8     16.2       -7.3      -6.4      6.1
    NRA, agric. total          na        na        0.3       0.2      -5.6       1.9     24.9        1.8       0.7     15.8
     Pakistan
    NRA, agric. inputs         na       -4.5     -2.1      -1.6        4.6       3.5       2.9       2.3       1.9       1.4
    NRA, domestic MSc          na        0.0      0.0       0.0        0.0       0.0       0.0       0.0       0.0       0.0
    NRA, border MSc            na       -1.3     23.9      10.9      -16.4     -12.8      -8.8     -12.5      -4.5       0.1
    NRA, agric. total          na       -5.8     21.7       9.3      -11.8      -9.3      -5.9     -10.2      -2.6       1.5
     SriLanka
    NRA, agric. inputs         0.0       0.0       0.0       0.0       0.0       0.0       0.0       0.0      0.0        0.0
    NRA, domestic MSc          4.2       8.1       6.9       5.0       5.1       5.0       3.6       1.5      0.7        0.9
    NRA, border MSc          -14.5     -38.0     -36.9     -25.4     -37.0     -24.2     -16.3      -3.1     10.8        7.8
    NRA, agric. total        -10.3     -29.9     -30.0     -20.3     -31.9     -19.2     -12.6      -1.7     11.5        8.6
     South Asia
    NRA, agric. inputs         0.0      -1.5      -0.2      -0.1       0.4       0.9      4.0        5.0       6.3      8.3
    NRA, domestic MSc          4.2       8.3      16.3      16.1       3.1       1.8      3.6        2.8      -0.1      0.2
    NRA, border MSc          -14.5    -14.7      -14.9     -15.4      -9.2      -2.5     13.5       -7.5      -6.2      5.2
    NRA, agric. total        -10.3      -7.8       1.2       0.6      -5.7       0.2     21.0        0.3       0.0     13.6
     Asian focus economies   (unweighted average)
    NRA, agric. inputs         0.0      -0.6      -0.3       0.3       1.1       1.1      1.0       0.9       1.1       1.3
    NRA, domestic MSc          1.4       0.6       2.4       1.4      -0.8      -0.9      0.1       0.0      -0.1       0.2
    NRA, border MSc          -13.4      -6.1       1.1      -0.9       0.3       6.5     17.7      20.8      26.2      30.9
    NRA, agric. total        -12.0      -6.2       3.2       0.9       0.6       6.6     18.8      21.7      27.3      32.4
     Asian focus economies   (weighted average)d
    NRA, agric. inputs         0.0      -0.5      -0.1       0.4       1.4       1.1       1.5       1.7       2.3      2.6
    NRA, domestic MSc          1.4       2.0      13.0      10.6       1.0      -5.3      -2.9      -2.5      -0.6     -0.7
    NRA, border MSc          -12.4      -4.2     -10.2     -10.8      -2.8     -17.4     -13.7      -4.0       4.3      8.2
    NRA, agric. total        -11.1      -2.7       2.6       0.3      -0.4     -21.6     -15.2      -4.8       6.0     10.2

a
  Weights for the sub-regional and regional averages are based on the gross value of
agricultural production at undistorted prices.
b
  Pakistan data for 1960-64 is 1961-64; Vietnam data for 1985-89 is 1986-1989; Taiwan data
for 2000-04 is 2000-03.
c
  MS = market support, either via domestic subsidies (or taxes if negative) or via a measure at
the border such as an import tariff or export subsidy (or, if negative, an import subsidy or
export tax)
d
  Weighted by the gross value of production of covered products at undistorted prices.

Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                                           52
                                                    53


Table 1.15: Gross subsidy equivalents of assistance to farmers, total and per farm worker,
Asian economies,a 1955 to 2004

(a) Total (constant 2000 US$ million using the US GDP deflator)
                                                                                     1985-
               1955-59   1960-64    1965-69   1970-74     1975-79       1980-84         89    1990-94    1995-99   2000-04
 Korea           -154       107        854      1672           6943          9335   13306      18594      17536     15289
 Taiwan          -394       133        132       439            605          1342    2500       3849       4170      3725
 China         -52857    -69648     -70671    -98931      -124086       -118224     -75780    -28381      15667     15644
 Indonesia         na        na         na      -848        3783             4131    -785      -2729      -4101      4286
 Malaysia          na      -250       -246      -547       -1097             -456      75        156          3       100
 Philippines       na      -225        735     -1082        -903             -299    1399       1850       3832      1951
 Thailand          na        na         na     -2434       -2148             -324    -645       -719        260       -14
 Vietnam           na        na         na        na          na               na    -726      -1815        -18      1602
 Bangladesh        na        na         na        na         583             -672     882       -103       -448       189
 India             46        61       -993     -7803       -8653              -49   21607       1600        281     15433
 Pakistan          na       -91       1089       -34        -815             -787    -380       -755       -260        95
 Sri Lanka        -68      -461       -455      -396        -571             -344    -194        -27        245       154
 Asian focus
 economies     -53426    -70373     -69554    -109965     -126359      -106348      -38740     -8481      37169     58455
 All Asian
 economiesa    -56836    -74865     -73994    -116984     -134424      -113136      -41213     -9023      39541     62186




(b) Per person engaged in agriculture (constant 2000 US$ using the US GDP deflator)a
               1960-64    1965-69     1970-74    1975-79        1980-84        1985-89      1990-94     1995-99    2000-04
 Korea              20        155         293       1196           1716           3041         5618        6445       6899
 Taiwan             76         76         261        390           1045           2077         3699        4795       5329
 Chinac           -235       -222        -281       -319           -280           -163          -57          31         31
 Indonesia          na         na         -27        113            113            -19          -60         -86         86
 Malaysia         -135       -126        -267       -515           -213             36           79           2         56
 Philippines       -33         99        -132        -99            -30            132          163         318        155
 Thailand           na         na        -163       -130            -18            -34          -36          13         -1
 Vietnam            na         na          na         na             na            -33          -73          -1         57
 Bangladesh         na         na          na         20            -22             26           -3         -12          5
 Indiac              0         -6         -43        -43              0             97            7           1         57
 Pakistan           -7         78          -2        -47            -41            -19          -35         -11          4
 Sri Lanka        -217       -195        -155       -207           -116            -60           -8          66         40
 Asian focus
 economies        -125       -115         -166          -174          -136          -46          -9         40         61
 All Asian
 economiesa       -125       -115         -166          -174          -136          -46          -9         40         61




                                                    53
                                                             54


Table 1.15 (continued): Gross subsidy equivalents of assistance to farmers, total and per farm
worker, Asian economies,a 1955 to 2004

              (c) by sub-sector (at undistorted farmgate prices, constant US$ billions)

                                                                                  Total GSE for all Asian economies
                                 Focus economies                     GSE        from all direct assistance to farmersd, e
                                                   GSE for non-   guesstimate
                 GSEe for just    GSEe for just      product       for other
                 covered farm      non-covered       specific       Asian                                       Import-
                   products       farm products     assistance    economiesc    TOTAL       Exportables       competing
    1955-59               -0.7              0.1             0.4        -56.6       -56.8           -58.6            10.1
    1960-64                0.8             -0.1            -1.0        -74.4       -74.7           -74.4            12.0
    1965-69                1.4             -0.3            -0.8         -74.4      -74.0           -78.6             14.8
    1970-74               -7.7             -3.7             0.3        -106.3     -117.4          -113.9             11.1
    1975-79               -0.9             -1.4            -0.7        -131.4     -134.4          -142.9             26.5
    1980-84              -76.4             -6.2            14.0         -44.6     -113.1          -140.3             26.6
    1985-89              -50.0              6.2            15.4         -12.8      -41.1           -97.1             48.4
    1990-94              -14.9              1.1             4.4           0.3       -9.1           -49.5             33.7
    1995-99               21.7              8.1            -0.1           9.8       39.5           -13.4             41.1
    2000-04               32.0             14.3            -1.5          15.8       60.6            -2.0             42.0
a
  Assumes the rate of assistance in non-studied economies is the same as the average for the
studied Asian economies, and that their share of the value of Asian agricultural production at
undistorted prices is the same as their average share of the region's agricultural GDP at
distorted prices was 6 percent. (It was actually 4 percent in 2004, but would have been
somewhat larger in earlier decades.)
b
  Pakistan data for 1960-64 is 1961-64; Vietnam data for 1985-89 is 1986-1989; Taiwan data
for 2000-04 is 2000-03.
c
  The GSE guesstimate includes non-focus economies, plus the backcasting for China and
India, such that it equals the sum of columns 1­4.
d
  The last three columns include GSE estimates for China pre-1981 and India pre-1965,
which are based on the assumption that the nominal rates of assistance to agriculture in those
years was the same as the average NRA estimates for those economies for 1981-84 and 1965-
69, respectively, and that the gross value of production in those missing years is that which
gives the same average share of value of production in total world production in 1981-84 and
1965-69, respectively. This assumption is conservative in the sense that for both countries the
average NRA was probably even lower in earlier years, according to the authors of those
country case studies.
e
  Gross subsidy equivalents including assistance to nontradables and non-product-specific
assistance.
f
  Gross subsidy equivalents including product-specific input subsidies.


Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                                             54
                                                      55



Table 1.16: NRA and gross subsidy equivalents of assistance to farmers in the Asian region,
by product, 1955 to 2004


(a) NRA (percent, at primary product level)
              1955-59   1960-64   1965-69   1970-74    1975-79    1980-84   1985-89   1990-94   1995-99   2000-04
Barley            41        84        72       120         101       166       357       524       543       563
Beef              38        25        34        44          95       101        94       145       106        85
Cassava           na        na        na       -23          -1        -9       -17       -11       -14       -10
Chickpea          na        50        24         1           0         8        12         9        15        19
Cocoa             na        na        -2        -3          -2        -2        -1        -2        -2         0
Coconut          -29       -29       -24        -8          -3       -11       -19       -34       -22        -8
Coffee            na        na        na        -7          -4        -9        -5        -5        -1        -2
Cotton            na       -19        12        63           7       -12        -2        -3         0         5
Egg              -25       -21        19         0          -6        10        22        27        23        51
Fruits &
vegetablesa       na         0         0         0           0        -8        -3       -11        -6        -4
Jute              na        na        na       -30         -37       -29       -35       -38        -6       -39
Maize             na       -10        50        19           8       -20        -6       -15         8        13
Milk              na        na        71       122         139       108       124        40        23        32
Oilseedsb         na        24        31        11          -5        22        35        21        22        22
Palmoil           na       -11       -11       -15         -14        -1        -2         2        -9        -3
Pigmeat          -10        16        59        51          47       -41       -39        -3         7         4
Poultry          -25         0        69        18          58        48        -2        20        17        12
Rice             -10        -6       -25       -17         -13       -27        -6        -9         2        18
Rubber           -16       -16       -14        -8         -19       -19       -14       -16         5         4
Sorghum           na        82        42        55          12         7        36         7        21        16
Sugar             na        96       163        13           2        37        39        13        20        43
Tea              -22       -39       -39       -28         -22       -18       -19       -10        -8        -7
Wheat            -33       -12        24        15          -3        -3        12         4        18        11
Asian focus
economiesc:     -11.1      -2.7       2.6       0.3        -0.4     -21.6     -15.2      -4.8       6.0     10.2




                                                      55
                                                             56


Table 1.16 (continued): NRA and gross subsidy equivalents of assistance to farmers in the
Asian region, by product, 1955 to 2004

              (b) GSE by product (at undistorted farmgate prices, constant $US millions)
                     1955-59   1960-64   1965-69   1970-74    1975-79    1980-84   1985-89   1990-94   1995-99   2000-04
    Barley               96      307        439      588           546      436       444       331      198        140
    Beef                 21       49        107      162           670      893       822      1410     1236        831
    Cassava              na       na         na      -86            -7      -87      -136       -84      -80        -41
    Chickpea             na     1201        499       40             0      193       268       149      224        255
    Cocoa                na       na          0        0            -1       -1        -4        -2       -1          0
    Coconut            -135     -104       -110     -543          -256     -841      -841     -1103    -1017       -273
    Coffee               na       na         na      -18           -42      -56       -34       -28      -14        -11
    Cotton               na      -72        338     1820           302    -1008      -147      -227      -20        197
    Egg                 -28      -29         33      -13           -41       70       150       213      199        282
    Fruits &
    vegetablesa          na        0         0         -5         19     -23014    -45349    -14769    -1304     -1239
    Jute                 na       na        na       -338       -275       -147      -193      -118      -12       -66
    Maize                na      -36       991        620        230      -4041      -977     -2530     1336      1926
    Milk                 na       na       605        756       9163       9044     10865      5162     4405      6459
    Oilseedsb            na     1212      1150        455       -260       1582      2609      2015     2176      1743
    Palmoil              na      -13       -20       -210       -380        -70      -101        63     -680      -210
    Pigmeat             -62      136       668        897       1464     -35274    -16203     -1232     3443      2019
    Poultry             -26       10       217         78        831       1603      -354      1700     2806      2023
    Rice               -353     -299     -8741     -13809     -10843     -32220     -5945     -7328     2150     11789
    Rubber              -51     -438      -322       -356      -1389      -1230      -734      -813     -121        48
    Sorghum              na     2036      1017       1240        359        186       568        30      231       125
    Sugar                na      476      2875        -36       -395       3665      3186      1605     1969      3738
    Tea                -160     -210      -158       -125       -140       -112      -100       -53      -42       -40
    Wheat               -19      243      1732        928       -443       -513      2457       719     4593      2322
    Asian focus
    economiesd:        -704       771     1377      -7690         -902   -76336    -50000    -14889    21676     32010

a
  Fruit and vegetables includes fruit and vegetables aggregates for India and China, and
banana, cabbage, chillies, garlic, onions, peppers and potatoes for other economies.
b
  Oilseeds includes groundnut, rapeseed, soybean and sunflower.
c
  For covered products only. Weights are production valued at undistorted prices.
d
  For covered products only, hence less than the totals in Table 1.15(a).

Source: Anderson and Valenzuela (2008), compiled from data reported in Chapters 2-12 of
this book




                                                             56
                                                     57


Table 1.17: Relative rates of assistance (RRA) to agriculture,a Asian focus economies, 1955
to 2004
                                           (percent)
                   1955-59   1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
  Korea
NRA Ag.               -3.3       4.9     16.3      46.1      71.8     118.6     159.8     197.6     164.8     171.9
NRA Non-Ag.           45.6      37.1     22.3      11.4      11.7       6.8       5.7       3.3       2.3       1.7
RRA                  -32.6     -21.4     -4.8      30.5      53.9     104.8     145.9     188.2     158.8     167.3
  Taiwan b
NRA Ag.              -15.8       4.7       3.9     12.0        8.9     18.7      33.8      46.3      54.9      70.9
NRA Non-Ag.            8.8       9.3       8.8      7.5        7.0      5.2       4.5       2.6       1.8       1.0
RRA                  -22.5      -4.2      -4.5      4.2        1.7     12.9      28.0      42.5      52.2      69.0
  China b
NRA Ag.              -45.2     -45.2     -45.2     -45.2     -45.2     -45.2     -35.5     -14.3       6.6       5.9
NRA Non-Ag.           41.6      41.6      41.6      41.6      41.6      41.6      28.3      24.9       9.9       5.0
RRA                  -60.5     -60.5     -60.5     -60.5     -60.5     -60.5     -49.9     -31.1      -3.0       0.9
  Northeast Asia
NRA Ag.              -43.1     -42.5     -42.2     -41.3     -40.0     -18.4     -26.2      -1.7     14.7      12.0
NRA Non-Ag.           40.9      40.8      40.0      39.7      39.4      71.1      18.8      15.0      6.8       3.3
RRA                  -58.2     -57.7     -56.6     -55.7     -53.7     -51.9     -38.0     -14.2      7.4       8.5
  Indonesia
NRA Ag.                na        na        na       -3.8      10.4      10.5      -1.9      -7.5      -9.7     13.9
NRA Non-Ag.            na        na        na       27.7      27.7      27.7      26.5      17.6      10.6      8.1
RRA                    na        na        na      -24.7     -13.6     -13.5     -22.5     -21.3     -18.3      5.4
  Malaysia
NRA Ag.                na       -7.6      -7.9      -9.4     -13.7      -4.9       1.4       2.6      -0.2       1.5
NRA Non-Ag.            na        7.4       7.0       7.1       6.5       5.2       3.9       2.8       2.0       0.9
RRA                    na      -14.0     -13.9     -15.5     -18.9      -9.6      -2.4      -0.3      -2.2       0.6
  Philippines
NRA Ag.                na       -1.7     14.3       -6.0      -7.2      -4.0     15.8      16.7      35.7      23.5
NRA Non-Ag.            na       19.0     20.3       16.3      16.3      12.9     11.0       9.9       8.6       6.4
RRA                    na      -17.4     -5.0      -19.8     -20.3     -14.9      4.3       6.1      24.9      15.9
  Thailand
NRA Ag.                na        na        na      -23.1     -15.9      -2.3      -6.9      -6.4       1.8      -0.2
NRA Non-Ag.            na        na        na       16.1      16.0      14.2      11.1      10.0       8.9       7.8
RRA                    na        na        na      -33.7     -27.5     -14.4     -16.3     -14.9      -6.5      -7.4
  Vietnam b
NRA Ag.                na        na        na        na        na        na      -15.9     -26.4       0.0     20.7
NRA Non-Ag.            na        na        na        na        na        na        4.3     -11.2       1.5     20.8
RRA                    na        na        na        na        na        na      -19.2     -17.4      -1.3      0.0
  Southeast Asia
NRA Ag.                na       -5.8      5.6      -10.2       0.1       4.9      -0.9      -4.7       0.0     12.1
NRA Non-Ag.            na       11.5     15.4       20.2      22.0      21.1      18.0      11.5       8.2      8.1
RRA                    na      -15.5     -8.5      -25.3     -18.0     -13.4     -16.1     -14.5      -7.7      3.7
  Bangladesh
NRA Ag.                na        na        na        na        3.1      -3.9     17.5       -2.4      -8.0       4.0
NRA Non-Ag.            na        na        na        na       28.4      22.4     28.5       33.3      29.0      23.4
RRA                    na        na        na        na      -19.7     -21.5     -8.6      -26.7     -28.6     -15.8
  India b
NRA Ag.               5.2       5.2       5.2       12.6      -7.4       4.1     67.5        2.0      -2.3     15.4
NRA Non-Ag.         113.0     113.0     113.0       83.1      64.8      59.3     48.6       15.9      12.6      5.2
RRA                 -56.3     -56.3     -56.3      -38.3     -43.8     -33.5     11.7      -12.1     -12.9     12.5
  Pakistan b
NRA Ag.                na      -1.0      21.7       9.3      -11.8      -9.3      -5.9     -10.2      -2.6       1.5
NRA Non-Ag.            na     169.7     224.5     146.7       44.0      48.3      45.1      39.3      27.0      14.6
RRA                    na     -63.8     -62.4     -55.9      -38.6     -38.6     -35.1     -35.2     -23.0     -11.5
  Sri Lanka
NRA Ag.              -2.7     -25.7     -27.6      -18.5     -29.0     -15.4     -11.2      -1.3      14.0     10.8
NRA Non-Ag.         104.9     124.6     138.4       70.7      52.9      57.1      59.0      47.1      36.4     22.9
RRA                 -52.5     -66.6     -68.0      -51.6     -53.5     -46.2     -44.3     -32.9     -16.3     -9.8
 South Asia
NRA Ag.               4.7       3.9       4.4        9.7      -7.7       1.8     47.1        0.2      -2.4     12.7
NRA Non-Ag.         112.7     115.5     143.1       81.7      57.8      54.6     39.9       18.6      15.0     10.1
RRA                 -56.2     -56.8     -57.0      -39.8     -41.6     -33.3      5.1      -15.5     -14.9      3.4




                                                     57
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Table 1.17 (continued): Relative rates of assistance (RRA) to agriculturea, Asian focus
economies, 1955 to 2004
                      1955-59   1960-64   1965-69    1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04
  Asian focus economies (unweighted average) c
NRA Ag.                -12.1       -8.3       -2.5      -3.1      -3.6       5.9     18.0      15.5      19.6      25.2
NRA Non-Ag.             62.8      65.2        72.0      42.8      28.8      22.1     19.3      12.3      10.0       8.4
RRA                    -44.7     -38.0       -34.4     -27.0     -22.2     -13.2     -1.2       2.9       8.7      15.5
  Asian focus economies (weighted average) d
NRA Ag.                -29.0     -27.7       -26.9     -24.3     -31.3     -18.8     -11.2      -2.6       7.5     11.7
NRA Non-Ag.             66.8      67.1        70.9      50.3      50.3      38.3      15.4      14.9       9.6      4.3
RRA                    -57.5     -56.4       -55.3     -47.9     -44.7     -40.8     -22.8     -15.2      -1.9      7.1
Dispersion of
national RRAs e         21.9      30.7       36.2      37.6      41.5      51.9      56.0      65.1      50.5      50.8

a
  The RRA is defined as 100*[(100+NRAagt)/(100+NRAnonagt)-1], where NRAagt and
NRAnonagt are the percentage NRAs for the tradables parts of the agricultural and non-
agricultural sectors, respectively.
b
  Pakistan data for 1960-64 is 1961-64; Vietnam data for 1985-89 is 1986-1989; Taiwan data
for 2000-04 is 2000-03. Estimates for China pre-1981 and India pre-1965 are based on the
assumption that the nominal rates of assistance to agriculture in those years was the same as
the average NRA estimates for those economies for 1981-84 and 1965-69, respectively, and
that the gross value of production in those missing years is that which gives the same average
share of value of production in total world production in 1981-84 and 1965-69, respectively.
This NRA assumption is conservative in the sense that for both countries the average NRA
was probably even lower in earlier years, according to the authors of those country case
studies.
c
  Simple averages of the above (weighted) national averages.
d
  Weighted averages of the above national averages, using weights based on gross value of
national agricultural production at undistorted prices.
e
  Dispersion is a simple 5-year average of the standard deviation around a weighted mean of
the national agricultural sector NRAs for the region each year.

Source: Anderson and Valenzuela (2008), drawn from NRA and RRA estimates reported in
Chapters 2-12 of this book.




                                                         58
                                              59


Table 1.18: Relative per capita income,a agricultural comparative advantage index,b and
nominal and relative rates of assistance to tradable agriculture, Asian focus economies,
200004

                               Relative per         Agric              NRA             RRA
                             capita income     comparative         (percent)       (percent)
                                                advantageb
    Korea                              212              26            137.3            167.3
    Taiwan                             232              28             61.3             69.0
    China                               21              58              5.9              0.9
    Indonesia                           17            173              12.0              5.4
    Malaysia                            74            107               1.2              0.6
    Philippines                         18              67             22.0             15.9
    Thailand                            38            204              -0.2             -7.4
    Vietnam                              8            301              21.2              0.0
    Bangladesh                           7              93              2.7            -15.8
    India                                9            143              15.8             12.5
    Pakistan                            10            137               1.2            -11.5
    Sri Lanka                           16            254               9.5             -9.8

    Asian focus economiesc              20               80            12.0                7.1
a
 Income per capita relative to the world average, 2000-04. (World=100)
b
  Agriculture and food's share of national exports as a percentage of agriculture and food's
share of global exports, 2000-04
c. Unweighted average for relative per capita income and agricultural comparative advantage;
weighted averages for NRA and RRA.

Sources: Columns 1 and 2: Sandri, Valenzuela and Anderson (2007); columns 3 and 4:
Anderson and Valenzuela (2008), drawn from NRA and RRA estimates reported in Chapters
2-12 of this book.




                                              59
                                                                 60


Table 1.19: Relationships between nominal rates of assistance and some of its determinants,
Asian region, 1960 to 2004

Explanatory
                   (1)       (2)       (3)       (4)       (5)        (6)       (7)       (8)       (9)     (10)      (11)      (12)
variable


Ln GDP per
capita     -0.28*        -0.21*    -0.23*    -0.22*    -0.11     -0.06      -0.14     -0.16*    -0.38*    -0.28*    -0.44*    -0.38*
               (-0.03)   (-0.03)   (-0.03)   (-0.03)   (-0.05)   (-0.05)    (-0.06)   (-0.06)   (-0.10)   (-0.9)    (-0.10)   (-0.11)
Ln GDP per
capita     0.23*         0.20*     0.21*     0.21*     0.19*     0.15*      0.21*     0.18*     0.23*     0.19*     0.22*     0.21*
squared    (-0.02)       (-0.01)   (-0.01)   (-0.01)   (-0.02)   (-0.02)    (-0.03)   (-0.02)   (-0.03)   (-0.02)   (-0.03)   (-0.03)
Importable
                         0.33*     0.34*     0.32*               0.40*      0.41*     0.40*               0.39*     0.39*     0.39*
                         (-0.04)   (-0.04)   (-0.04)             (-0.04)    (-0.04)   (-0.04)             (-0.04)   (-0.04)   (-0.04)
Exportable
                         -0.13     -0.12     -0.14               -0.03      -0.03     -0.03               -0.04     -0.04     -0.04
                         (-0.04)   (-0.04)   (-0.04)             (-0.04)    (-0.04)   (-0.04)             (-0.04)   (-0.04)   (-0.04)
Revealed
Comparative                                  0.03*                                    -0.07*                                    -0.04
Advantagea                                   (-0.01)                                  (-0.02)                                 (-0.03)
Trade
Specializati                       0.11*                                      -0.13                                   -0.03
on Indexb                          (-0.03)                                  (-0.09)                                 (-0.10)
Constant
               0.14*        0.03      0.00   -0.02     0.07*       -0.11      -0.05      0.07   -0.49*    0.23*     -0.19     -0.08
               (-0.01)   (-0.03)   (-0.03)   (-0.04)   (-0.02)   (-0.04)    (-0.05)   (-0.07)   (-0.12)   (-0.11)   (-0.09)   (-0.10)



R2               0.10      0.27      0.27      0.27      0.07      0.23       0.22      0.22      0.14      0.28      0.29      0.29
No. of obs.     2766      2766      2594      2594      2766      2766       2594      2594      2766      2766      2594      2594
Country FE         No        No        No        No       Yes         Yes      Yes       Yes       Yes       Yes       Yes       Yes

Time FE            No        No        No        No        No         No        No        No       Yes       Yes       Yes       Yes



a
 Revealed comparative advantage index is the share of agriculture and processed food in
national exports as a ratio of that sector's share of global exports (world=1).
b
 Net exports as a ratio of the sum of exports and imports of agricultural and processed food
products (world=1).

Notes: Dependent variable for regressions is NRA by commodity and year. Results are OLS
estimates, with standard errors in parentheses and significance levels shown at the 99%(*).
The main explanatory variable is ln GDP per capita in $10,000s.

Source: Authors' estimates




                                                                 60
                                                   61


Table 1.20: Percentage consumer tax equivalent of policies assisting producers of covered
farm products,a Asian focus economies, 1955 to 2003
   (a)
         aggregate CTEs by countryb
                1960-64    1965-69    1970-74    1975-79    1980-84    1985-89    1990-94    1995-99   2000-04
 Korea               6.6       14.5       39.7       63.9     114.3      148.5      176.4      144.9     143.8
 Taiwan            15.0        17.2       22.2       15.7       36.4       82.7     116.5      136.8     166.5
 China                na         na         na         na      -38.7      -35.8      -14.2       0.4       0.2
 Indonesia            na         na       -9.0        6.4        8.4       -4.3       -6.7     -11.2      18.3
 Malaysia          11.1         1.4        3.6       18.1       18.1       28.8       15.7       2.8       6.1
 Philippines       -5.5        12.0       -4.5       -7.4       -3.1       23.7       22.3      40.2      30.6
 Thailand             na         na      -27.3      -19.6       -5.7       -6.1       -6.8       3.1       2.3
 Vietnam              na         na         na         na         na      -11.5      -24.3       1.0      19.3
 Bangladesh           na         na         na        3.1       -4.6       17.0       -2.9      -9.3       4.4
 India                na      -19.1      -21.8     -10.8        -0.6       14.1       -8.7      -7.4       2.9
 Pakistan            0.7       38.0       14.4      -11.2       -5.5        1.2      -13.2      -5.8       3.6
 SriLanka           -9.7      -14.7       -2.6      -19.8      -11.5       -6.1        3.5      20.4      20.7
 Asian focus economies:
  Unweighted
  average            7.2       7.1        1.8        3.8       10.5       21.6       21.5       26.3      31.7
  Weighted
  averagec           8.8     -11.3      -14.6        -1.8     -14.5      -12.7        -4.0       1.2       1.7
  Dispersion
  of national
  CTEsd            11.5       28.0       27.3       25.7       46.8       60.8       66.6       61.3      66.9




                                                   61
                                                     62


Table 1.20 (continued): Percentage consumer tax equivalent of policies assisting producers of
covered farm products,a Asian focus economies, 1955 to 2003

                                    (percent, at primary product level)

       (b) Regional CTEs by product
                              1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-03
    Barley                        65        97        57       120       326       411       341       335
    Beef                          32        41        99       110        95       156       106       109
    Cassava                       na       -22         1        -8       -13        -8       -12        -9
    Chickpea                       5         0         0         3         5         0         3         7
    Cocoa                         -3        -4        -1        -2        -2        -3        -3         0
    Coconut                      -24        -9        -3       -12       -22       -36       -25        -9
    Coffee                        na       -17       -11       -18       -13        -8        -3        -1
    Cotton                        -5        14        -4       -16       -11       -15        -6        -3
    Egg                           19         0        -6        10        22        27        23        38
    Fruit & vegetablese            0         0       -26       -45       -18         0         0         0
    Jute                          na       -30       -37       -30       -36       -39        -7       -39
    Maize                         23        -1         6        -4        17        -7         8        14
    Milk                          71       122       139       108       123        39        23        34
    Oilseedsf                     25        15        26        30        29        25        27        27
    Palmoil                       -1        -9        -3        10         1        12       -15        -6
    Pigmeat                       58        49        47       -37       -38        -6         1         1
    Poultry                       69        18        58        49        -2        17         3         2
    Rice                         -41       -37       -17       -15        -4        -8         0        18
    Rubber                       -52        -6       -19       -23       -19       -11         2         2
    Sorghum                        9        30         7         0        23        -5        10         0
    Sugar                        121         0        -3        31        31         8        16        43
    Tea                          -58       -29       -19       -14       -17       -10       -15       -17
    Wheat                          8        -1        -7         7        22        15         8         1
    Asian focus economies:
     Weighted averagec           -11       -15         -2      -14        -13        -4        1         2
     Dispersion of regional
    product CTEsg                 59        50        47        56        92       103        82        82
a
  Assumes the CTE is the same as the NRA derived from trade measures (that is, not
including any input taxes/subsidies or domestic producer price subsidies/taxes), except for
rice, barley, wheat and sorghum in Korea and wheat in Taiwan.
b
  Pakistan data for 1960-64 is 1961-64; Vietnam data for 1985-89 is 1986-89; and Taiwan
data for 2000-04 is 2000-03.
c
  Weights are consumption valued at undistorted prices, where consumption (from FAO) is
production plus imports net of exports plus change in stocks of the covered products.
d
  Simple 5-year average of the annual standard deviation around a weighted mean of the
national average CTE.
e
  Fruit and vegetables includes fruit and vegetables aggregates for India and China, and
banana, cabbage, chillies, garlic, onions, peppers and potatoes for other economies.
f
  Oilseeds includes groundnut, rapeseed, soybean and sunflower.
g
  Simple 5-year average of the annual standard deviation around a weighted mean of the
regional average CTE for the covered products shown above.

Source: Anderson and Valenzuela (2008), compiled from NRABS estimates and production
data reported in Chapters 2-12 of this book and self sufficiency ratios based on FAO data to
get proxy consumption data.


                                                     62
                                               63


Table 1.21: Value of consumer tax equivalent of policies assisting producers of covered farm
products, Asian focus economies, 1955 to 2003
      (constant 2000 US$ million at primary product level, using the US GDP deflator)

   (a) aggregate CTEsa

                        1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-03
Korea                       635     1607      6020      9497     13019     19275     16969     14617
Taiwan                      675      466       636      1287      2586      3711      4284      3964
China                        na       na        na    -62859    -33988       923     58257     44497
Indonesia                    na    -1676      2147      3378      -500      -884     -2524      4849
Malaysia                      5        2       163       196       208       169        43        67
Philippines                 485     -890      -467        96      1808      2059      4178      2509
Thailand                     na    -1552     -1253      -347      -229      -344       168        83
Vietnam                      na       na        na        na       -36      -939       320       991
Bangladesh                   na    -1546       771      -668      1193       -75      -621       300
India                    -17659   -27664    -12120     -2586     11985     -6025     -5811      9079
Pakistan                   1636     -317      -698      -433        27      -883      -543       189
Sri Lanka                   -38       46      -107       -94       -26       124       206        99
Asian focus economies     -9961   -24347     -3060    -46901    -40694     -8400     17749     32686
                  b
All Asian economies      -10597   -25901     -3255    -49894    -43292     -8936     18882     34773

   (b) CTE per capita

                        1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-03
Korea                      21.2      48.3    165.2     242.1     312.6     440.7     370.5     308.3
Taiwan                     50.5      30.5     37.8      69.8     131.4     179.4     202.1     175.1
China                        na        na       na     -60.9     -30.6       0.8      46.6      34.2
Indonesia                    na     -13.3     15.3      21.6      -2.9      -4.7     -12.4      22.3
Malaysia                    0.5       0.2     12.7      13.5      12.6       9.0       2.0       2.8
Philippines                14.5     -23.0    -10.5       1.9      31.7      32.2      58.6      31.9
Thailand                     na     -40.5    -28.9      -7.2      -4.4      -6.2       2.8       1.3
Vietnam                      na        na       na        na      -0.6     -13.6       4.3      12.3
Bangladesh                   na     -22.2      9.8      -7.5      11.7      -0.7      -4.8       2.1
India                     -34.1     -47.6    -18.7      -3.6      15.0      -6.8      -6.0       8.7
Pakistan                   28.5      -4.9     -9.4      -5.0       0.3      -7.6      -4.1       1.3
Sri Lanka                  -3.3       3.6     -7.7      -6.3      -1.6       7.2      11.4       5.3
Asian focus economies      -5.9     -12.7      -1.4     -20.2     -16.0      -3.0       5.9     10.2
                  b
All Asian economies        -6.3     -13.5      -1.5     -21.5     -17.0      -3.2       6.3     10.9




                                               63
                                                  64


Table 1.21 (continued): Percentage consumer tax equivalent of policies assisting producers of
covered farm products,a Asian economies, 1955 to 2003

          (constant 2000 US$ million at primary product level, using the US GDP deflator)

       (c) Regional CTEs by product
                           1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-03
    Barley                    430       577       442       376       441       400       276       226
    Beef                      118       172       966      1291      1108      2934      2257      2264
    Cassava                     0        -8         0        -5        -7        -5        -6        -3
    Chickpea                  150         0         0        91       121         0        58       125
    Cocoa                       0         0         0         0         0         0         0         0
    Coconut                   -76      -564      -239      -877      -880     -1104     -1087      -367
    Coffee                      0       -23       -22       -23       -15       -10       -12        -3
    Cotton                   -211       563      -165     -1289      -643     -1045      -477      -178
    Egg                        34       -13       -41        70       150       215       200       234
    Fruit & vegetablesc         0        -7        -3    -23355    -46810    -14771     -1252      -916
    Jute                        0         0      -189       -92      -146       -86        -9       -46
    Maize                     578      -118       186      -757      1800      -855      1483      2037
    Milk                      608       759      9183      9099     10904      5150      4422      6676
    Oilseedsd                 211      -446      -674      1748      3003      2344      2945      2973
    Palmoil                     0        -8        -9        50       -17        98      -255       -70
    Pigmeat                   636       839      1418    -28008    -14856     -1449      3270      2222
    Poultry                     0         0         7         5         6        34        37        40
    Rice                   -16207    -25199    -13033    -14210     -3768     -6261      -939     11059
    Rubber                     -3        -3       -49       -72       -77       -87       -21        10
    Sorghum                   343       854       230        -8       379      -118        99         0
    Sugar                    2173      -835      -913      3294      2812      1029      1565      3953
    Tea                       -17       -24       -27       -16       -16       -10       -22       -22
    Wheat                    1076      -905      -957      2223      5147      3429      2397       151
    Asian focus
    economies:              -9942    -24312     -3065    -48839    -41683     -8411     17735     32753
a
  Pakistan data for 1960-64 is 1961-64; Vietnam data for 1985-89 is 1986-1989; and Taiwan
data for 2000-04 is 2000-03.
b
  Assumes the rate of assistance to covered products in non-studied economies is the same as
the average for the studied Asian economies, and that their share of the value of Asian
agricultural production at undistorted prices is the same as their average share of the region's
agricultural GDP at distorted prices during 1990-2004, which was 6 percent. These dollar
amounts do not include non-covered farm products, which amount to almost one-third of
agricultural output (see last row of Table 1.10), nor any mark-up that might be applied along
the value chain.
c
  Fruit and vegetables includes fruit and vegetables aggregates for India and China, and
banana, cabbage, chillies, garlic, onions, peppers and potatoes for other economies.
d
  Oilseeds includes groundnut, rapeseed, soybean and sunflower.

Source: Anderson and Valenzuela (2008), compiled from NRABS estimates and production
data reported in Chapters 2-12 of this book and self sufficiency ratios based on FAO data to
get proxy consumption data.




                                                  64
                                                                           65


Figure 1.1: Real GDP per capita in Asian and other developing focus economies relative to
the United States, 1950 to 2006
                                   (United States = 100)
(a) Asian focus economies


     70


     60


     50


     40


     30


     20


     10


         0
              1950-54 1955-59 1960-64 1965-69 1970-74 1975-79 1980-84 1985-89 1990-94 1995-99 2000-04 2005-06


                              China                Korea and Taiw an              Southeast Asia              South Asia



(b) Asia relative to other developing and transition economies


    40



    30



    20



    10



    0
             1950-54   1955-59    1960-64    1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04    2005-06


                         Africa             Latin America          Europe's transition economies          Asia (excl Japan)




a
 Shown relative to the United States which is set as the numeraire at 100. Southeast Asia is
Indonesia, Malaysia, Philippines, Thailand and Vietnam. South Asia is Bangladesh, India,
Pakistan and Sri Lanka.
Source: Based on 1990 International Geary-Khamis dollars from Maddison (2003) to 2001,
updated using real GDP per capita growth data from the World Bank's World Development
Indicators.




                                                                           65
                                                          66


Figure 1.2: Nominal rates of assistance to agriculture, individual Asian focus economies,
1980-84 and 2000-04a

                                                       (percent)



    160
    140
    120
    100
     80
     60
     40
     20
     0
    -20
    -40
    -60
                              es




                                                   a


                                                                 a




                                                                                                         an


                                                                                                                    nd
                                                              ka


                                                                                  na




                                                                                               a
                                          m




                                                                                  sh
          a


                 an




                                                                                             si
                                                di


                                                              si
        re




                                        na
                           in




                                                            an




                                                                                                                  la
                                                                                                       st
                                                                               hi


                                                                              de
                                                           ne




                                                                                           ay
                                              In
                iw
      Ko




                         pp




                                                                                                     ki


                                                                                                                ai
                                                                       C
                                      et




                                                          iL
              Ta




                                                                            la


                                                                                        al
                                                         do




                                                                                                   Pa


                                                                                                              Th
                                   Vi
                        i li




                                                                          ng



                                                                                       M
                                                       Sr
                                                       In
                      Ph




                                                                        Ba




                                                        1980-84      2000-04




a
  There is no data for Vietnam in 1980-84. Estimates for China pre-1981 are based on the
assumption that the nominal rate of assistance to agriculture in those years was the same as
the average NRA estimates for the country for 1981-84, and that the gross value of
production in those missing years is that which gives the same average share of value of
production in total world production in 1981-84.

Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                                          66
                                             67


Figure 1.3: Nominal rates of assistance, by product, Asian region, 1980-84 and 2000-04
                                           (percent)

    (a) unweighted average across 12 economies

             Soybean
               Sugar
              Poultry
                Rice
                 Milk
             Pigmeat
               Wheat
                Beef
               Maize
                                                                     2000-04
               Cotton
              Rubber                                                 1980-84
             Coconut
              Palmoil

                         -50        0             50          100           150




    (b) weighteda average across 12 economies


           Beef
          Sugar
            Milk
           Rice
        Soybean
          Maize
         Poultry
          Wheat
          Cotton
                                                                2000-04
        Pigmeat
         Rubber                                                 1980-84
         Palmoil
        Coconut

                   -50         0           50           100           150


a
  Weights based on gross value of agricultural production at undistorted prices [each NRA
(by country, by product) is weighted by the country's value of production of that commodity
in a given year]. Products with less than 1 percent of the gross value of regional production
are excluded. These include: cocoa, onion, chilies, barley, jute, sunflower, garlic, peppers,
cabbage, cassava, potato, egg, tea, coffee, sorghum, rapeseed, chickpea, groundnut, and beef.

Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                             67
                                                                           68


Figure 1.4: Nominal rates of assistance for rice, milk and sugar, individual Asian focus
economies, 1980-84 and 2000-04
                                           (percent)
   (a) Rice
    400


    300


    200


    100


      0


    -100
                                              es




                                                                                             ka
                                                                       a



                                                                                    a




                                                                                                                              nd



                                                                                                                                         an
                                                                                                                  na
                                  a




                                                           m




                                                                                                       sh
              a


                     an



                                si




                                                                    di



                                                                                 si
            re




                                                         na
                                           in




                                                                                           an




                                                                                                                            la



                                                                                                                                       st
                                                                                                               hi
                                                                                                       de
                                                                               ne
                              ay




                                                                  In
                    iw
          Ko




                                         pp




                                                                                                                          ai



                                                                                                                                     ki
                                                                                                               C
                                                      et




                                                                                            il
                  Ta




                                                                                                     la
                           al




                                                                             do



                                                                                         Sr




                                                                                                                        Th



                                                                                                                                   Pa
                                                   Vi
                                        i li




                                                                                                   ng
                          M




                                                                           In
                                      Ph




                                                                                                 Ba
                                                                    1980-84        2000-04

     (b) Milk
    300


    200


    100


      0
                    Korea                           India                               China                      Pakistan

                                                               1980-84      2000-04

     (c) Sugar
     300


     200


     100


       0
             Bangladesh      Vietnam           Pakistan          Philippines       Indonesia           India           China         Thailand

                                                                   1980-84         2000-04


a
 Data for Vietnam in 1980­84 is that for the first 5-year period available, which is 1986­89
for rice and 1990­95 for sugar.

Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.


                                                                           68
                                                     69


Figure 1.5: Nominal rates of assistance to exportable, import-competing and alla agricultural
products, Asian region, 1955 to 2004

                                         (percent)
    (a) unweighted averages across 12 economies


           40
           30
           20
           10
            0
           -10   1955-59 1960-64 1965-69 1970-74 1975-79 1980-84 1985-89 1990-94 1995-99 2000-04

           -20
           -30
           -40

                                  import-competing        exportables       total




    (b) weighted averages across 12 economies


     50

     30


     10


     -10     1955-59 1960-64 1965-69 1970-74 1975-79 1980-84 1985-89 1990-94 1995-99 2000-04


     -30


     -50

                                 import-competing         exportables       total


a
  The total NRA can be above or below the exportable and importable averages because
assistance to nontradables and non-product specific assistance is also included.
b
  The exportables, import-competing and total estimates are based on China pre-1981 and
India pre-1965 values estimated on the assumption that the nominal rate of assistance to
agriculture in those years was the same as the average NRA estimates for those economies
for 1981-84 and 1965-69, respectively, and that the gross value of production in those
missing years is that which gives the same average share of value of production in total world
production in 1981-84 and 1965-69, respectively.
Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                                     69
                                                                         70


Figure 1.6: Nominal rates of assistance to agricultural and non-agricultural tradable products
and relative rate of assistance,a Asia region, 1955 to 2004

                                                                      (percent)

    (a) unweighted averages across 12 economies
                                  80

                                  60

                                  40
                        percent




                                  20

                                   0

                                  -20

                                  -40

                                  -60
                                        1955­59 1960­64 1965­69 1970­74 1975­79 1980­84 1985­89 1990­94 1995­99 2000­04
                                                                                  year

                                                      NRA ag tradables            NRA non-ag tradables     RRA



    (b) weighted averages across 12 economies

                  80


                  40
        percent




                   0


                  -40


                  -80
                            1955­59 1960­64 1965­69 1970­74 1975­79 1980­84 1985­89 1990­94 1995­99 2000­04
                                                                           year


                                                   NRA ag tradables           NRA non-ag tradables       RRA



a
 The RRA is defined as 100*[(100+NRAagt)/(100+NRAnonagt)-1], where NRAagt and
NRAnonagt are the percentage NRAs for the tradables parts of the agricultural and non-
agricultural sectors, respectively.

Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                                                         70
                                                                                71


Figure 1.7: Relative rates of assistance to agriculture,a Asian focus economiesb and
unweighted regional average, 1980-84 and 2000-04

                                                                           (percent)


                 170


                 120


                 70
       percent




                 20


                 -30


                 -80
                                                                  a
                                                            es




                                                                                     a
                                                                            si a




                                                                                                                  d




                                                                                                                                   n
                                                                                                s ia




                                                                                                                           ka
                                                                                                        m
                        a




                                                                                                                                              h
                                   n




                                                                 di




                                                                                     in




                                                                                                                 an




                                                                                                                                  ta
                       re




                                                                                                                                            es
                                    a


                                              e




                                                                                                       na




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                                                      pin

                                                                 In

                                                                           ne




                                                                                              ay
                                                                                   Ch
                                 iw




                                                                                                                                k is
                                              ag
                   Ko




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                                                                                                       et




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                             Ta




                                                   i li p




                                                                                          al
                                                                      do
                                            er




                                                                                                            Th




                                                                                                                             Pa
                                                                                                   Vi




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                                                                                          M




                                                                                                                   Sr
                                        av




                                                                      In
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                                                                                                                                   Ba
                                        d
                                   te
                                 igh
                             we
                            un
                       ia,
                   As




                                                                           1980­84                2000­04

a
  The RRA is defined as 100*[(100+NRAagt)/(100+NRAnonagt)-1], where NRAagt and
NRAnonagt are the percentage NRAs for the tradables parts of the agricultural and non-
agricultural sectors, respectively.
b
  No estimates for Vietnam in 1980-84

Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                                                                71
                                                                             72


Figure 1.8: NRAs and RRAs, China and India, 1964 to 2005
                                                                          (percent)

                                      INDIA                                                                                 CHINA

  120
                                                                                  120




   80                                                                                 80




                                                                                      40
   40


                                                                                       0
                                                                                           1965-69 1970-74 1975-79 1981-84 1985-89 1990-94 1995-99 2000-04
    0
        1965-69 1970-74 1975-79 1980-84 1985-89 1990-94 1995-99 2000-04
                                                                                  -40


  -40
                                                                                  -80



  -80


                                                       NRA agriculture       NRA non-agriculture            RRA




Source: Based on estimates in Anderson and Valenzuela (2008)


                                                                             72
                                                                73


Figure 1.9: Nominal and relative rates of assistance,a Asian, African and Latin American
regions, 1965 to 2004b
                                           (percent)
    (a) NRA



                        20

                        10

                         0
              percent




                        -10

                        -20

                        -30
                              1965­69   1970­74    1975­79    1980­84     1985­89         1990­94       1995­99   2000­04
                                                                      year

                                                        LAC                   Africa               Asia


     (b) RRA

              10


              -10
    percent




              -30


              -50


              -70
                          1965­69   1970­74   1975­79    1980­84     1985­89           1990­94     1995­99   2000­04
                                                                year

                                                  LAC                Africa                      Asia


a
 5-year weighted averages with value of production at undistorted prices as weights.
b
  Estimates for China pre-1981 and India pre-1965 are based on the assumption that the
nominal rates of assistance to agriculture and national share or regional agricultural
production in those years were the same as the average NRA estimates for those economies
for 1981-84 and 1965-69, respectively.
Source: Anderson and Valenzuela (2008), drawn from NRA estimates reported in Chapters 2-
12 of this book.




                                                                73
                                                 74


Figure 1.10: Income distribution, Asian regions and the world,a 2000

   (a) East Asia region


                                                  All households
             .5
             .4




                                                  Farm households
               .3
          Density
             .2




                                                             Non-farm households
             .1
             0




                          1              3             5             7                9
                              Monthly household per capita income (1993 PPP, log)



   (b) South Asia region
               .8




                                          All households
               .6




                                        Farm households
            Density
              .4
               .2




                                                      Non-farm households
               0




                      1            3              5                7              9
                              Monthly household per capita income (1993 PPP, log)




                                                 74
                                                      75



      (c) World

                   0.4
                                                      All households
                   0.3




                                                       Farm households
         Density
                   0.2




                                                             Non-farm households
                   0.1
                   0




                         0           2                 4                 6         8

                             Monthly household per capita income (1993 PPP, log)


a
    The vertical line is the US$1/day poverty line in 1993 PPP terms

Source: Bussolo, De Hoyes and Medledev (2009).




                                                      75
                                                            76


Figure 1.11: Relationships between real GDP per capita, comparative advantage, and
agricultural NRA and RRA,a Asian focus economies, 1955 to 2005

   (a) Regression of ln real GDP per capita on NRA, with country fixed effects



                     .6
                   NRA
                     .3
                     0
                     -.3
                     -.6




                               -1             0                 1                 2                  3
                                                      Ln real GDP per capita

                                         ASIA NRA obs                 ASIA fitted values




                                Coefficient             Standard error                         R2
                                   0.17                     0.01                              0.19

   (b) Regression of ln real GDP per capita on RRA, with country fixed effects
                          2
                          1
                    RRA
                          0
                          -1




                                -1                0               1                   2                  3
                                                        Ln real GDP per capita

                                          ASIA RRA obs                   ASIA fitted values




                           Coefficient                Standard error                        R2
                              0.27                        0.01                             0.46

Notes: Dependent variable for regressions is NRA or RRA by country and year, expressed as
a fraction. Results are OLS estimates. The explanatory variable is the natural log of real GDP
per capita expressed in $10,000.



                                                            76
                                                          77


Figure 1.11 (continued): Relationships between real GDP per capita, comparative advantage,
and agricultural NRA and RRA,a Asian focus economies, 1960 to 2004

    (c) Regression of revealed comparative advantage on NRA, with country fixed effects




                         1.8
                         1.2
                        NRA
                         .6
                         0
                         -.6




                                 0         1                  2                3              4
                                                              RCA

                                          ASIA NRA obs                ASIA fitted values




                         Coefficient                  Standard error                               R2
                           -0.12                          0.02                                    0.08

    (d) Regression of revealed comparative advantage on RRA, with country fixed effects
                                2.1
                                1.5
                                .9
                          RRA
                                .3
                                -.3
                                -.9




                                      0        1                2                  3               4
                                                                RCA

                                               ASIA rra obs             ASIA fitted values




                       Coefficient                 Standard error                             R2
                         -0.26                         0.03                                  0.09
a
  Dependent variable for regressions is NRA or RRA by country and year, expressed as a
fraction. Results are OLS estimates. The explanatory variable revealed comparative
advantage, which is the share of agriculture and processed food in national exports as a ratio
of that sector's share of global merchandise exports.
b
  Using 5-year average data for revealed comparative advantage.

Source: Based on economic data in Sandri, Valenzuela and Anderson (2007) and NRA
estimates from Anderson and Valenzuela (2008) which are drawn from Chapters 2-12 of this
book.



                                                          77
                                                                                                             78


Figure 1.12: Rice NRA and international rice price, Asian region, 1970 to 2005
                 (left axis is int'l price in USD, right axis is NRA in percent)

(a) South Asian focus economies


             600                                                                                                                                                                                          30
                                                                                                                                                                                                          20
             500
                                                                                                                                                                                                          10
                                                                                                                                                                                                          0
             400
                                                                                                                                                                                                          -10




                                                                                                                                                                                                                   NRA %
   USD




             300                                                                                                                                                                                          -20
                                                                                                                                                                                                          -30
             200
                                                                                                                                                                                                          -40
                                                                                                                                                                                                          -50
             100
                                                                                                                                                                                                          -60
                -                                                                                                                                                                                         -70
                       1970

                                 1972

                                           1974

                                                     1976

                                                                   1978

                                                                             1980

                                                                                       1982

                                                                                               1984

                                                                                                      1986

                                                                                                              1988

                                                                                                                       1990

                                                                                                                                  1992

                                                                                                                                            1994

                                                                                                                                                          1996

                                                                                                                                                                    1998

                                                                                                                                                                             2000

                                                                                                                                                                                         2002

                                                                                                                                                                                                 2004
                                                                                               Pw                     S Asia

Correlation coefficient is -0.75

    (c) Southeast Asian focus economies

             600                                                                                                                                                                                30

  600
             500                                                                                                                                                                     40         20
                                                                                                                                                                                     30
  500                                                                                                                                                                                           10
             400
                                                                                                                                                                                     20
                                                                                                                                                                                                0
   USD




  400
             300                                                                                                                                                                     10                 NRA %
                                                                                                                                                                                                -10     Pw (USD)
  300                                                                                                                                                                                0
                                                                                                                                                                                                        SE Asia
             200
                                                                                                                                                                                     -10
                                                                                                                                                                                                -20
  200
             100                                                                                                                                                                     -20        -30
  100
                                                                                                                                                                                     -30
                -                                                                                                                                                                               -40
                       1970
                                1972

                                         1974
                                                  1976

                                                            1978
                                                                      1980

                                                                                1982
                                                                                        1984
                                                                                               1986
                                                                                                      1988
                                                                                                             1990
                                                                                                                      1992
                                                                                                                               1994
                                                                                                                                         1996
                                                                                                                                                   1998
                                                                                                                                                             2000
                                                                                                                                                                      2002
                                                                                                                                                                              2004




         -                                                                                                                                                                           -40
      60


               63


                      66


                                69


                                          72


                                                    75


                                                                78


                                                                               81

                                                                                         84


                                                                                                 87


                                                                                                          90


                                                                                                                      93


                                                                                                                                96


                                                                                                                                           99


                                                                                                                                                       02


                                                                                                                                                                      05
    19


             19


                    19


                              19


                                        19


                                                  19


                                                              19


                                                                             19

                                                                                       19


                                                                                               19


                                                                                                        19


                                                                                                                    19


                                                                                                                              19


                                                                                                                                         19


                                                                                                                                                     20


                                                                                                                                                                    20




                                                                                       Pw                    SE Asia

Correlation coefficient is -0.59
Source: Authors' compilation based on data in Anderson and Valenzuela (2008)



                                                                                                             78
                                                  79


Figure 1.13: NRA for rice, Malaysia, 1960 to 2004

                                             (percent)



  240

  200

  160
                           y = 6.3532x - 12489                          y = -6.3075x + 12681
  120

  80

  40

    0
    1955   1960   1965   1970    1975      1980    1985   1990   1995      2000     2005       2010
  -40




Source: Authors' compilation based on data in Anderson and Valenzuela (2008)




                                                  79
                                                                                   80


Figure 1.14: Relationship between RRA and the trade bias index for agriculture, Asian focus
economies,a 1980­84 and 2000­04

           a. 1980­84


                                   1.7
     Relative Rate of Assistance




                                   1.2
                                                           Korea
                                   0.7


                                   0.2                                     Malaysia                                              Taiwan

                                                                                            Indonesia
                                               India           Thailand                   Bangladesh
                                   -0.3                                                                     Philippines
                                                                   Sri Lanka          Pakistan
                                                  China
                                   -0.8
                                      -0.70   -0.60    -0.50       -0.40      -0.30     -0.20       -0.10      0.00       0.10   0.20
                                                                             Trade Bias Index




           b. 2000­04

                                   1.7
                                              Korea
     Relative Rate of Assistance




                                   1.2


                                   0.7                                                                              Taiwan
                                                                                   Philippines
                                                                           India        Indonesia
                                   0.2
                                                                                                            China
                                                                                         Malaysia
                                                                            Vietnam            Pakistan, Sri Lanka, Thailand
                                   -0.3                   Bangladesh


                                   -0.8
                                      -0.70   -0.60    -0.50       -0.40      -0.30     -0.20       -0.10      0.00       0.10   0.20
                                                                             Trade Bias Index




a
    There are no data for Vietnam in 1980­84.

Source: Authors' compilation based on data in Anderson and Valenzuela (2008)



                                                                                   80
                                                                   81


Figure 1.15: NRAs for Japan, Korea and China and date of accession to GATT or WTO, 1955 to 2005

                                                                (percent)


                    200
                                 Japan                                                                China
                             (1955 = 16.6% )                                                      (2001 = 4.5% )
                    150                            Korea
                                               (1967 = 7.4% )

                    100
          NRA (%)




                     50


                      0
                           1955-59 1960-64 1965-69 1970-74 1975-79 1980-84 1985-89 1990-94 1995-99 2000-05

                     -50


                    -100
                                                     Japan          Korea         China


Source: Based on estimates in Anderson and Valenzuela (2008)



                                                                   81
                                                                          82


Figure 1.16: RRAs and log of real per capita GDP, India and Northeast Asian focus economies, 1955 to 2005
                                   200
  Relative Rate of Assistance, %


                                   150
                                                                         Korea                       Japan

                                   100

                                                                                                    Taiwan
                                    50



                                     0
                                          7             8            9                  10                   11
                                                India
                                    -50
                                              China

                                   -100
                                                            ln real GDP per capita
Source: Based on estimates in Anderson and Valenzuela (2008)




                                                                          82