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2018 | Book

Introduction Read chapter Read first chapter

The Political Economy of Agricultural and Food Policies

Author: Dr. Johan Swinnen

Publisher: Palgrave Macmillan US

Book Series : Palgrave Studies in Agricultural Economics and Food Policy

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

Food and agriculture have been subject to heavy-handed government interventions throughout much of history and across the globe, both in developing and in developed countries. Today, more than half a trillion US dollars are spent by some governments to support farmers, while other governments impose regulations and taxes that hurt farmers. Some policies, such as price regulations and tariffs, distribute income but reduce total welfare by introducing economic distortions. Other policies, such as public investments in research, food standards, or land reforms, may increase total welfare, but these policies come also with distributional effects. These distributional effects influence the preferences of interest groups and in turn influence policy decisions. Political considerations are therefore crucial to understand how agricultural and food policies are determined, to identify the constraints within which welfare-enhancing reforms are possible (or not), and finally to understand how coalitions can be created to stimulate growth and reduce poverty.

Table of Contents

Frontmatter

Part I

Frontmatter
Chapter 1. Introduction
Abstract
Food and agriculture have been subject to heavy-handed government interventions throughout much of the history and across the globe, both in developing and in developed countries. Today more than 500 billion (half a trillion) US dollars are spent by some governments to support farmers while at the same time some governments impose regulations and taxes that hurt farmers. Political considerations are crucial to understand these policies since almost all agricultural and food policies have redistributive effects and are therefore subject to lobbying and pressure from interest groups and used by decision-makers to influence society for both economic and political reasons.
Johan Swinnen
Chapter 2. Political Coalitions in Agricultural and Food Policies
Abstract
Political economy models of agricultural and food policy often consider “producers”, “consumers”, and “taxpayers” as the main agents. One (theoretical) reason is its didactic use, that is, to avoid unnecessary complications in deriving policy effects and identify equilibria. Another (empirical) reason is the absence of disaggregated information of policy impacts on various agents within (or outside) the value chain. In reality many more agents play a role, such as input suppliers (such as land owners, seed and agro-chemical companies, or banks), traders, food processors, retail companies, environmental and food advocacy groups, and so on. These different agents have sometimes joined forces (“political coalitions”) with farmers or with final consumers to influence policy-makers in setting public policies. The coalitions are not static.
Johan Swinnen
Chapter 3. Factors Influencing Policy Choices
Abstract
Various schools of thought in political economy research (see Chap. 1), and many applications to agricultural and food policies, have shown how a variety of factors influence policy decisions and their implementation. These factors are income distribution, economic structure, governance structures (including domestic political institutions and international organizations), ideology, costs of information, transaction costs, and so on. This chapter explains how these factors influence policies. The rest of the book will draw upon insights explained here to discuss the political economy of specific agricultural and food policies and the governments’ choices.
Johan Swinnen

Part II

Frontmatter
Chapter 4. The Development Paradox
Abstract
One of the most puzzling stylized facts of economic policy is that developed countries subsidize their farmers, whereas developing countries tax them: the degree of discrimination against agriculture increases as farmers constitute a larger fraction of the population. This chapter documents this “development paradox” and uses political economy theories to explain it.
Johan Swinnen
Chapter 5. Anti-Trade Bias and the Political Economy of Instrument Choice
Abstract
Many political economy studies focus on explaining the level of policy intervention, but the explanation of the policy instruments is equally important since the distortionary effects are equally dependent on the choice of the instrument as on the level of the intervention. A stylized fact of agricultural and food policies is the anti-trade bias, the observation that import-competing sectors are often protected while exportable commodities are often taxed. This chapter documents these patterns and provides political economy explanations of the choice of policy instruments.
Johan Swinnen
Chapter 6. Development Paradox and Anti-Trade Bias Revisited?
Abstract
There have been dramatic changes in agricultural policies in the past 25 years, both in rich and in poor countries. Rather than the divergence observed in the 1950s to the 1980s, there is significant convergence in taxation and subsidization. This chapter documents this convergence and explains the reasons for it.
Johan Swinnen
Chapter 7. Policy Reform in History: Europe, the USA, and China
Abstract
This chapter studies specific cases of policy reforms in greater detail. It analyzes the political economy of important changes in agricultural and food policies in Europe, the USA, and China. These countries provide fascinating cases to study the political economy of agricultural and food policies.
Johan Swinnen

Part III

Frontmatter
Chapter 8. Food Price Volatility
Abstract
In the late 2000s global prices spiked. Many governments, in particular in developing and emerging countries, intervened to reduce the effect of the global food price spikes, trying to insulate the domestic market. This chapter first discusses the costs and benefits of price stabilization through government policy and then discusses political economy considerations.
Johan Swinnen
Chapter 9. Crises, Media, and Agricultural Development Policy
Abstract
The “food crisis” of the early twenty-first century, associated with the dramatic increase in food prices discussed in Chap. 8, also induced extensive policy discussions on the impact of food prices on poverty and hunger and on agricultural development policies. This chapter discusses the impact of prices on poverty and hunger; how the food crisis caused dramatic changes in the communication of these principles; how the interaction of mass media and food price shocks have pushed food security and agricultural development problems to the top of the policy and donor agenda; and has resulted in major increases in funding for agricultural development in developing countries.
Johan Swinnen
Chapter 10. Food Standards
Abstract
Standards to prevent adulterations and frauds have existed as long as products have been exchanged and traded. Recently, standards have spread rapidly, both geographically and in addressing new concerns. This has triggered vigorous debates on the impacts on international trade and development. An important critique is that standards are (non-tariff) trade barriers. Political economy analyses yield nuanced results on the protectionist impact of standards. Standards may stimulate or hamper trade. Lobbying of farmers, firms, and consumers may lead to standards being set “too low” or “too high”. Dynamic effects may lead to persistence of suboptimal standards.
Johan Swinnen
Chapter 11. Public Investments in Agricultural and Food Research
Abstract
Public investment in agricultural research is an important source of productivity growth. However, there is underinvestment in research in both poor and rich countries. This chapter uses political economy analysis to explain why there is underinvestment in both rich and poor countries if these investments have such high social rates of returns.
Johan Swinnen
Chapter 12. Land and Institutional Reforms
Abstract
Land rights and other institutions play an important role in agricultural development. Changes in land rights and other institutions have both growth and distributional effects. This chapter studies draws on several historical cases, including major political and economic reforms in the early and late twentieth centuries in Europe and Asia, as “natural experiments” to provide insights on the political economy of land and institutional reforms.
Johan Swinnen
Chapter 13. Policy Interactions
Abstract
Many public policies discussed in previous chapters exist together and sometimes are implemented simultaneously. This may cause interactions between the policies and their political economy. This chapter analyzes both economic interaction effects (where one policy affects the distributional and welfare effects of other policies) and political interaction effects (when the existence or introduction of one policy affects the political incentives of governments to introduce or change other policies).
Johan Swinnen
Backmatter
Metadata
Title
The Political Economy of Agricultural and Food Policies
Author
Dr. Johan Swinnen
Copyright Year
2018
Electronic ISBN
978-1-137-50102-8
Print ISBN
978-1-137-50101-1
DOI
https://doi.org/10.1057/978-1-137-50102-8