World Agricultural Trade

World Agricultural Trade

World Agricultural Trade

World Agricultural Trade

Synopsis

With the signing of the GATT agreement in 1995, the wheat trade was expected to enter into a period of liberalized markets. But has this agreement really changed the face of the world agricultural trade? This book explores the new world trade environment and the implications of the current adjustments for Turkey and countries like it. Contributors examine the GATT agreement on agriculture to show how it failed to move the wheat trade into a free market environment. Most countries have retained vestiges of the interventionist policies of the past; many still tax or subsidize their wheat producers. By looking at the history of trade barriers, the changing role of trade institutions, and the impacts of the GATT agreement worldwide, World Agricultural Trade shows that much remains to be done in terms of policy change before the wheat trade can claim to operate in a free trade environment.

Excerpt

Government intervention in agricultural markets has been troublesome for developed and developing countries alike. In the past, these interventions resulted in developed countries' subsidization of agriculture and developing countries' taxation of agriculture in favor of urban/industrial sectors. Between 1961 and 1983, Turkish agriculture was subject to negative protection as a result of indirect measures, such as macroeconomic policies and industrial protection. Until the early 1980s, Turkey maintained an overvalued exchange rate, which served as an implicit tax on Turkish farmers. This policy was changed in 1982 when Turkey allowed its currency to be traded in world money markets. In recent years, Turkey has subsidized agriculture such that, by the mid-1990s, total annual transfers to agriculture exceeded US $12 billion.

Agriculture is an important industry in Turkey, representing about 15 percent of the GDP. Compared to the European Union (EU) countries, as shown in table 1, Turkey is still an agricultural country with about 44 percent of the labor force engaged in the agricultural sector. Because of its substantial share of the overall economy, national policies and the agricultural trade environment have significant impacts on the rest of the Turkish economy. Thus, this sector's efficient operation is crucial to the Turkish economy.

Agricultural exports comprised about 14 percent of total Turkish exports in 1994, a dramatic decline from 57 percent in 1980 (table 2). Although the value of agricultural exports increased slightly during this period, agriculture's share of Turkey's export trade declined primarily because it did not keep up with the sevenfold increase in total exports during this same period. Agricultural imports increased as well, both in absolute and relative terms, as per capita income rose. The balance of trade in agricultural commodities continues to be positive; however, this gap has narrowed since 1980 (table 2). One of the studies in this volume concludes that Turkey is . . .

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.