GATT Law, Agricultural Trade, and Developing Countries: Lessons from Two Case Studies

This article examines the relevance and applicability of thelaw of the General Agreement on Tariffs and Trade (GATT) totwo specific problems faced by Thailand: the negotiations ofa voluntary export restraint agreement on cassava with the EuropeanEconomic Community and the increased subsidies on rice givenby the United States under the Food Security Act of 1985. In the case of cassava, Thailand appears to have had parts ofGATT law on its side, but the government was very reluctantto use the law to its own advantage. This reluctance was dueto unclear procedures under GATT as to how to make effectiveuse of these legal advantages. On the rice subsidy issue, conversely,the substantive law is unclear and provides limited protectionfor competing exporters. The wider lesson drawn from the two cases is that GATT's lawshould be modified and its role reevaluated so that both developedand developing countries can participate more fully in the GATTsystem. This will be necessary if the GATT's laws are to becomeuseful instruments in the hands of developing countries in theirbilateral negotiations with contracting parties which are themore powerful economically.     

The Thai Rural Credit System: Public Subsidies, Private Information, and Segmented Markets

Thailand has sought to increase farmers' access to credit bygovernment intervention. In 1966 it created a government agriculturalbank to lend solely to farm households, and beginning in thelate 1970s it required commercial banks to lend heavily in therural sector, either directly or by making deposits in the agriculturalbank. The result was an enormous expansion of credit in therural sector. But because formal lenders were either unableor unwilling to solve the information problems involved in thebroad range of rural credit transactions, the informal creditsector (which charged interest rates many times higher thanthe formal sector) continued to thrive. Using household surveysand surveys of moneylenders, this article provides a detailedanalysis of the ways in which lenders in the informal sectorhave solved the information problems of providing credit. Theauthors argue that the informal sector is competitive, and thathigh interest rates reflect high information costs, not thescarcity of funds.     

Thailand after 1997

The years following 1997 divide themselves into three roughly equal periods. The first was the painful period of deleveraging from the excesses of the bubble before the crisis, from which the economy emerged with more dependence on exports. The second period covered the government under Thaksin Shinawatra, who faced a mostly favorable external environment, and was therefore able to pursue many populist policies. Eventually, he was brought down by the military. The brief military government was followed by a number of short‐lived governments, the last one of which was left to tackle the consequences of the global financial crisis, which led to a very deep downturn but a quick recovery.     

Food insecurity in developing countries

Despite improvements in the world food predicament, the underlying causes of food crises have not disappeared. The aim of this article is to improve understanding of food security problems in Asia, Africa and Latin America, and to assess the relative merits of alternative national and international intervention schemes. The article includes discussion of the concept of ‘food security’, policies that can be undertaken at the national level, a quantitative assessment of national food insecurity for a sample of LDCs, and an examination of the proposed international policies to enhance food security in food-deficit countries.