Publication: Distortions to Agricultural Incentives in Japan, Korea, and Taiwan
Loading...
Date
2008-09
ISSN
Published
2008-09
Author(s)
Editor(s)
Abstract
The story of agricultural policy in Northeast Asia over the past 50 years illustrates the dramatic changes that can occur in distortions to agricultural incentives faced by producers and consumers at different stages of economic development. In this study of Japan, the Republic of Korea (the southern part of the peninsula, hereafter referred to as Korea) and the island of Taiwan, China (hereafter referred to as Taiwan), the authors estimate the degree of distortions for key agricultural products as well as for the agricultural sector as a whole over a period when these economies transitioned from low- or middle- to high-income status the beginning of the so-called East Asian economic miracle of dramatic industrial development. The three economies in terms of the nature of their economies, including their resource endowments that determined the course of their modern economic growth and development. The evolution of agricultural policies in the three economies is then reviewed before discussing how to measure distortions to agricultural incentives using the methodology from Anderson et al. (2008), the focus of which is on nominal and relative rates of assistance. Implications of empirical findings for policy reforms in the three economies are discussed in the final section, where the authors also identify lessons for later-developing economies experiencing similar structural transformations in the course of their economic growth. Statistical observations are found to be consistent with the hypothesis that the success of rapid industrialization that advanced these economies to the middle-income stage resulted in declines in agriculture's comparative advantage associated with the growing income disparity between farmers and employees in non-agricultural sectors.
Link to Data Set
Citation
“Honma, Masayoshi; Hayami, Yujiro. 2008. Distortions to Agricultural Incentives in Japan, Korea, and Taiwan. Agricultural Distortions Working Paper;35. © World Bank. http://hdl.handle.net/10986/28189 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Role of Agriculture in a Modernizing Society(World Bank, Washington, DC, 2012-05)China's success in addressing food problems after adopting the reforms in 1978 has been nothing less than remarkable. Grain output (rice, wheat and maize) has almost doubled and most hunger has been eliminated. Ever since China embarked on its reform agenda more than 30 years ago, its economic growth and poverty reduction have been nothing less than remarkable. Agriculture has been an important contributor to these developments. Since 1978, China has almost doubled its cereal production (rice, wheat and maize) and it is now feeding 1.3 billion people, or 20 percent of the world's population, while having less than 11 percent of the world s agricultural land and less than 6 percent of its water. New challenges are presenting themselves for China's agriculture, and old ones are resurfacing. High (land saving) Total Factor Productivity (TFP) growth and increasingly open domestic and international markets, combined with grain self-sufficiency targets, a multitude of very small, fragmented production structures, and distorted land and labor markets have defined Chinese agriculture over the past three decades. The relative importance of agriculture s three problems in policymaking thus evolves during the course of development away from the food to the farm and field problems. This shift has however recently been compounded by a resurgence of the food problem, as global supplies struggle to keep up with demand. China's agriculture anno 2030 will be predominantly a modern commercial smallholder agriculture that ensures self-sufficiency in cereal food (rice and wheat), but not in cereal feed (maize and soybeans). The sector will maximize rural employment opportunities in labor intensive high value agricultural products and act as a diligent custodian of its precious natural resources.Publication Evaluative Lessons for Agriculture and Agribusiness(World Bank, Washington, DC, 2011-01)Agricultural investments made by developing countries and multilateral development banks (MDBs) have declined in recent decades. This decline is associated with a slowdown in the growth of agriculture productivity. Most development institutions have recognized the damage caused by this past neglect, in part evident in rising food prices, and renewed attention to agriculture and agribusiness is emerging. But this renewed interest will need to deliver results, especially in Sub-Saharan Africa, where the MDBs have had the least success but where the needs and opportunities are enormous. This paper synthesizes recent work by the independent evaluation agency members of the Evaluation Cooperation Group (ECG) and incorporates lessons from related research by MDBs and from the academic literature on agriculture and agribusiness. The objectives of the paper, in addition to distilling evaluative lessons for agriculture and agribusiness, are to examine the key constraints on the sector and to provide evaluators, operational staff, and policy makers with an evaluative perspective on interventions in countries at different stages of development.Publication Senegal(World Bank, Washington, DC, 2015-08)The performance of Senegal’s agricultural performance exemplifies the impact of unmanaged risk on productivity among vulnerable smallholder crop producers and pastoralists. The government of Senegal has historically responded to drought and other shocks with direct financial support to farmers as well as general assistance to the rural population. The World Bank, with support from the group of eight (G-8) and the United States Agency for International Development (USAID) and in collaboration with the Ministry of Agriculture and Rural Equipment (MARE), commissioned the present study. The objective of this assessment was to assist the government of Senegal to: (1) identify, analyze, quantify, and prioritize principal risks facing the agricultural sector; (2) analyze the impact of these risks; and (3) identify and prioritize appropriate risk management interventions that may contribute to improved stability, reduced vulnerability, and increased resilience of agricultural supply chains in Senegal. This report presents a summary of the assessment’s key findings. Chapter one gives introduction. Chapter two provides an overview of the agricultural sector in Senegal and a discussion of key growth constraints. An assessment of the main agricultural risks is presented in chapter three. Chapter four analyzes the frequency and severity of highlighted risks and assesses their impact. Chapter five presents some stakeholder perceptions of risks and evaluates levels of vulnerability among various livelihood groups. The study concludes in chapter six with an assessment of priorities for risk management and a broad discussion of possible risk management measures that can help to strengthen the resiliency of agricultural supply chains and the livelihoods they support.Publication Ghana Agricultural Sector Risk Assessment(World Bank, Washington, DC, 2015-06)Improved agricultural risk management is one of the core enabling actions of the Group of Eight’s (G-8’s) New Alliance for Food Security and Nutrition. The Agricultural Risk Management Team (ARMT) of the Agriculture and Environment Services Department of the World Bank conducted an agricultural sector risk assessment to better understand the dynamics of agricultural risks and identify appropriate responses, incorporate agricultural risk perspective into decision-making, and build capacity of local stakeholders in risk assessment and management.Publication Paraguay Agricultural Sector Risk Assessment(World Bank, Washington, DC, 2015-06)This report is the result of a World Bank mission that visited Paraguay in June 2013 at the request of the Government of Paraguay. The mission’s objective was to identify, quantify, and prioritize agriculture risks that determine the volatility of agriculture gross domestic product (GDP), based on a methodology to assess sector risks developed by the World Bank. The methodology stipulates a two-phase process. The first phase (risk evaluation), which is in volume one of this report, was reviewed by the government and evaluates the current situation and perspective of agriculture sector risks, starting from the standpoint of supply chains. From here, and based on the identification of the most important risks, given their frequency and severity, a list of possible solutions was produced in addition to the existing public and private programs and policies. This process is completed with a second phase, where an action plan was prepared (volume two) that can be executed in the medium term to reduce sector risks and to contribute to the sustainability of agriculture investments. The significant efforts undertaken by the government to maintain support programs in critical production and trade areas of the sector are recognized, as well as the institutional development to strengthen the response capacity to agriculture risks. Chapter one gives introduction. Chapter two presents information about the agriculture sector and its recent performance is included, allowing to determine the most important supply chains for this risk assessment and to place the relative economic and social importance of the various commodities and production methods in the appropriate context. In chapter three, a comprehensive assessment of production, market, and enabling environment risks is undertaken for the main commercial and family farming supply chains, in addition to livestock. Chapter four shows the repercussions that risks have had in the past, in particular aggregated losses incurred by supply chain actors. Chapter five assesses the impacts of these losses throughout the supply chains and explores the relative vulnerability of the different actors. Chapter six presents the results and ranking of risks, a list of possible solutions jointly with different public initiatives where some identified risks are addressed.
Users also downloaded
Showing related downloaded files
Publication Governance Matters IV : Governance Indicators for 1996-2004(World Bank, Washington, DC, 2005-06)The authors present the latest update of their aggregate governance indicators, together with new analysis of several issues related to the use of these measures. The governance indicators measure the following six dimensions of governance: (1) voice and accountability; (2) political instability and violence; (3) government effectiveness; (4) regulatory quality; (5) rule of law, and (6) control of corruption. They cover 209 countries and territories for 1996, 1998, 2000, 2002, and 2004. They are based on several hundred individual variables measuring perceptions of governance, drawn from 37 separate data sources constructed by 31 organizations. The authors present estimates of the six dimensions of governance for each period, as well as margins of error capturing the range of likely values for each country. These margins of error are not unique to perceptions-based measures of governance, but are an important feature of all efforts to measure governance, including objective indicators. In fact, the authors give examples of how individual objective measures provide an incomplete picture of even the quite particular dimensions of governance that they are intended to measure. The authors also analyze in detail changes over time in their estimates of governance; provide a framework for assessing the statistical significance of changes in governance; and suggest a simple rule of thumb for identifying statistically significant changes in country governance over time. The ability to identify significant changes in governance over time is much higher for aggregate indicators than for any individual indicator. While the authors find that the quality of governance in a number of countries has changed significantly (in both directions), they also provide evidence suggesting that there are no trends, for better or worse, in global averages of governance. Finally, they interpret the strong observed correlation between income and governance, and argue against recent efforts to apply a discount to governance performance in low-income countries.Publication Governance Matters VIII : Aggregate and Individual Governance Indicators 1996–2008(2009-06-01)This paper reports on the 2009 update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2008: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. These aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 35 data sources provided by 33 different organizations. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. The authors also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. They find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time. The aggregate indicators, together with the disaggregated underlying indicators, are available at www.govindicators.org.Publication Design Thinking for Social Innovation(2010-07)Designers have traditionally focused on enchancing the look and functionality of products.Publication Measuring Financial Inclusion : The Global Findex Database(World Bank, Washington, DC, 2012-04)This paper provides the first analysis of the Global Financial Inclusion (Global Findex) Database, a new set of indicators that measure how adults in 148 economies save, borrow, make payments, and manage risk. The data show that 50 percent of adults worldwide have an account at a formal financial institution, though account penetration varies widely across regions, income groups and individual characteristics. In addition, 22 percent of adults report having saved at a formal financial institution in the past 12 months, and 9 percent report having taken out a new loan from a bank, credit union or microfinance institution in the past year. Although half of adults around the world remain unbanked, at least 35 percent of them report barriers to account use that might be addressed by public policy. Among the most commonly reported barriers are high cost, physical distance, and lack of proper documentation, though there are significant differences across regions and individual characteristics.Publication Government Matters III : Governance Indicators for 1996-2002(World Bank, Washington, DC, 2003-08)The authors present estimates of six dimensions of governance covering 199 countries and territories for four time periods: 1996, 1998, 2000, and 2002. These indicators are based on several hundred individual variables measuring perceptions of governance, drawn from 25 separate data sources constructed by 18 different organizations. The authors assign these individual measures of governance to categories capturing key dimensions of governance and use an unobserved components model to construct six aggregate governance indicators in each of the four periods. They present the point estimates of the dimensions of governance as well as the margins of errors for each country for the four periods. The governance indicators reported here are an update and expansion of previous research work on indicators initiated in 1998 (Kaufmann, Kraay, and Zoido-Lobat 1999a,b and 2002). The authors also address various methodological issues, including the interpretation and use of the data given the estimated margins of errors.