Issues in Trade Liberalization

Abstract

Almost all governments in the world intervene in the determination of agricultural production and prices. As a consequence, international trade in agricultural products is affected. This is not a new phenomenon, as governments have done so from very early times for various reasons, such as to safeguard adequate food supplies, to extract resources from farm populations, or to exchange agricultural products for other desired commodities and services. These objectives still characterize agricultural policies in many developing countries today and, to some extent, also in the developed industrial countries. While in developing countries, because of the dominance of agriculture in employment and production, the major objective is often extraction of resources from the agricultural sector for the development of the entire economy, in developed countries relatively few people are still engaged in agricultural production, so supporting the incomes of these few at levels comparable to the rest of the population is the major objective of intervention. A multitude of interventions that influence domestic agriculture in virtually all countries has led to considerable distortions in international trade in the contemporary world.