The Political Economy of Agricultural and Food Policies

Winner of the European Association of Agricultural Economists Book Award 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. Third, there are also important new questions to be addressed. How have important institutional and political reforms in the 1980s and the 1990s affected agricultural policy distortions? How have changes in international organizations and international trade agreements affected agricultural policy distortions? (Examples of these developments over the past decade include effects of the Uruguay Round Agreement on Agriculture (URAA), establishment of the WTO, the North American Free Trade Agreement (NAFTA), EU enlargement, etc.) How have policies (and goverments) responded to major changes in global agricultural markets, and to new global challenges such as climate change, growing bio-energy markets and food price spikes? All this has resulted in a series of new theoretical and empirical research on the political economy of agricultural and food policies. II. Objective and Organization of the Book The objective of this book is to integrate key insights of both the older and the new literature and provide a comprehensive review (and to end by pointing out remaining gaps in our knowledge and promising areas for further research). The book is planned to have two major parts. The first part will review key insights from the theoretical and empirical literature on factors that affect agricultural and food policy (and the political economy mechanisms behind them). This includes an analysis of the role of inequality and structural changes in the economy, the role of political institutions and ideology, the impact of crises, and the political economy of information and the role of the mass media. The second part will use these insights and use them to provide explanations for specific empirical observations. This includes addressing why agricultural protection increased (in a non-linear fashion) in most of the 20th century, why there has been a turnaround in the past 30 years and subsidization in rich countries has declined at the same time when agricultural taxation of poor c