Consistency or conflict in OECD agricultural trade and aid policies.

The effect of OECD agricultural trade and subsidy policies is less clear. The relevant parameter is negative in the base regression and most alternatives, but the large error undermines certainty. Thus, we find tenuous evidence to support assertions that OECD agricultural policies hamper growth in agricultural GDP per worker in developing countries. However even in the event there is an effect, it may be offset in those cases where preferential access is large enough relative to the size of the sector.

The authors would like to thank Stefan Tangermann, Martina Garcia, and Bryce Wood for useful comments on an earlier draft.

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(1) Serious measurement errors are likely. Gardner (2005) points to often-dubious assumptions made in estimating agricultural value added, such as estimated capital flows. Labor force statistics are often based largely on interpolation or extrapolation.

(2) To calculate indicators based on NPCs and NACs, developing countries' commodity production value weights were evaluated at the world prices used in the OECD's own calculations. Pasture area is included to reflect support to ruminants (beef, sheepmeat, and dairy). The calculation is based exclusively on the commodities of the OECD's support estimates, but is adjusted by the share of these commodities in agricultural land to reflect the share of crops appearing in OECD support data in a developing country's total production. Data measuring crop and pasture area are from the FAO.

Joe Dewbre is Senior Economist in the Agriculture and Development Division of the OECD's Trade and Agriculture Directorate. Wyatt Thompson is Assistant Professor at the University of Missouri, Columbia. Joshua Dewbre is pursuing graduate studies in development economics at American University, Washington DC.

This article was presented in a principal paper session at the AAEA annual meeting (Portland, OR, July 2007). The articles in these sessions are not subjected to the journal's standard refereeing process. Table 1. Base Regression of Growth in Agri-cultural GDP per Worker Explanatory Parameter Error t-Statistic Variable AID per hectare of -0.003 0.001 -2.85

agricultural land Country-specific -0.005 0.004 -1.31

NPC NPC x Pref. Dummy 0.004 0.006 0.67

(>1% of Ag

GDP) Share of PSE crops 0.005 0.001 3.81

in total ag. land Real agriculture -0.001 0.002 -0.53

GDP in base

period Sub-Saharan Africa -0.006 0.004 -1.56

dummy Note: Independent variables are in logarithmic form. Table 2. Regressing Agricultural GDP per Worker Growth Over Subsets of Data and Alternative Specifications

Aid

Coeff. Error Base regression, subsets of data Including only those countries where:

Ag GDP < $750/worker -0.002 0.002

Ag GDP >$1000/worker -0.003 0.001

Population < 3.8 million -0.003 0.001

Population > 4.5 million -0.003 0.001 Only those countries where aid to agriculture share in agricultural GDP was:

... below 1 % -0.002 0.002

... below 2.5% -0.003 0.001

... below 5% -0.003 0.001

... above 1 % -0.001 0.002

... above 2.5 % 0.002 0.003

... above 5% 0.006 0.004

Half period: 1986-1994 -0.002 0.002

Half period: 1995-2004 -0.003 0.001 Alternative variables, base data

NAC instead of NPC -0.003 0.001 Threshold for preference dummy instead of > 1 % of GDP set at:

... at least 0.5% -0.003 0.001

... at least 2% -0.003 0.001

... at least 5% -0.002 0.001 With SSA cross terms 0.004 0.002

non-SSA coefficients -0.003 0.001

NPC

Coeff. Error Base regression, subsets of data Including only those countries where:

Ag GDP < $750/worker -0.004 0.005

Ag GDP >$1000/worker 0.000 0.009

Population < 3.8 million -0.010 0.011

Population > 4.5 million -0.005 0.005 Only those countries where aid to agriculture share in agricultural GDP was:

... below 1 % -0.010 0.008

... below 2.5% -0.010 0.006

... below 5% -0.009 0.004

... above 1 % -0.002 0.005

... above 2.5 % 0.001 0.006

... above 5% 0.009 0.008

Half period: 1986-1994 -0.016 0.008

Half period: 1995-2004 0.003 0.006 Alternative variables, base data

NAC instead of NPC -0.005 0.004 Threshold for preference dummy instead of > 1 % of GDP set at:

... at least 0.5% -0.003 0.004

... at least 2% -0.006 0.004

... at least 5% -0.005 0.004 With SSA cross terms -0.002 0.008

non-SSA coefficients -0.003 0.005

NPC x Pref.