Market Performance of International Agriculture as Modified by Government Subsidies and Trade Barriers

Many developed countries have reduced agricultural market performance in the last decade with increased domestic subsidies and trade barriers. Several data sets were used to illustrate the extent of market distortion among some markets. Economic theory can show that these distortions reduce the general welfare in the countries with high trade barriers as well as the traditional agricultural exporting countries. The dairy industries appear to have the highest Producer Subsidy Equivalent. Among the developed countries, Western European countries and the Pacific Rim countries have caused major distortions in international markets of many agricultural products. Market performance in agricultural industries would be substantially improved if these major distortions were eliminated.