IO Consortium for Measuring Agricultural Protection David Laborde, Will Martin & Simla Tokgoz World Bank 29 June 2017

Ag-Incentives Consortium Importance of measuring agricultural distortions Need for a consortium Approaches and key results Value to the Bank

Importance of Measuring Distortions Agricultural trade distortions have big impacts On farm incomes On consumer costs On world prices Small sector but very high distortions And costly variance in distortions Unless we can measure It’s hard to recommend policy reforms It’s difficult to negotiate

Data needs Would like to have near-global coverage Certainly need coverage of the big countries To capture impacts on world prices Want broad coverage of smaller, poor countries Where trade distortions may have big impacts on poverty Need coverage of many commodities And over time

Need for a Consortium

Public good under-provided Only one study provided near-global measures of agricultural distortions Kym Anderson project at World Bank covered 1955-2007 What is needed is regularly updated information Like the OECD Monitoring work Too big a task for any one person or organization

Consortium possibilities OECD coverage expanding Now OECD plus major developing countries Inter-American Development Bank Agrimonitor project FAO-MAFAP Coverage of important developing countries World Bank Three South Asia studies plus ongoing monitoring IFPRI Hosting website, policy analyses

Ag-Incentives Consortium

Ag-Incentives Consortium Currently FAO-MAFAP, Inter-American Development Bank, IFPRI, OECD and the World Bank Approaches creation of a community of practice harmonization & consolidation of database making information publicly available

Initial release in 2017 One measure Around 80 countries Nominal rate of protection (NRP) Around 80 countries Released through website With regular updates

Approaches and key results

Measurement approach Much agricultural support is provided in non-transparent ways Quotas, licences, tariff-rate-quotas, bans Not visible like ad valorem tariffs Standard response is to use approaches like comparisons of domestic and international prices Requires very careful measurement

Current measure 𝑁𝑅𝑃=( 𝑃𝑃 𝑅𝑃 −1)*100 Nominal Rate of Protection (NRP) 𝑁𝑅𝑃=( 𝑃𝑃 𝑅𝑃 −1)*100 PP = producer price & RP = reference price A tariff equivalent, distinct from a PSE Need measures of prices, adjusted to ensure comparability of product & location Volumes of production to allow aggregation Exchange rates

Process Commitment to 1 yearly update Data collection twice a year Consolidated database (public, SQL, Tableau Viz) Data processing and quality check [Python, GAMS] Data collection with IOs (Excel Workbooks) Commitment to 1 yearly update Data collection twice a year Online data documentation Harmonization Exchange rate Cross Checks Internal external Data elimination metadata

Extension to domestic support Agreed in principle to extend from NRP to NRA Likely to follow OECD approach But as we refine the approach, an excellent time to discuss

15 year dynamics

Nominal Rate of Protection in Agriculture: A changing Landscape Anderson and Valenzuela (2008) www.ag-incentives.org

Comparison with other measures Nominal Rate of Protection: Benefit: includes all forms of protection, incl NTBs Limitation: policy interventions not always identified No bilateral NRP Hard to identify impacts of tariff preferences Complementary with other data sources WTO/UNCTAD tariff measures GTAP measures Kee et al measures of tariffs & NTBs

Bank studies on South Asia

South Asia studies, NRP

Value for the Bank

Country policy dialogue If your country is included in the database Data provide a valuable summary of policies And impacts for individual commodities & overall Allow comparison with other countries If your country is not in the database Consider using the PSE/NRP methodology Powerful & well understood And contributing data to this global public good

Global policy discussions Valuable for monitoring policy developments Understanding impacts of rich country policies on poor countries And poor country policies on their own farmers and consumers

http://www.ag-incentives.org/ Consortium approach to providing this vitally needed global information Regular contributions from OECD, IADB, FAO-MAFAP Contributions from World Bank, IFPRI Well-defined procedures, regularly updated Valuable for policy dialogue Analysis of policies– and built-in comparison with others World Bank hugely important Both as user and contributor