The impact of agricultural policy distortions on the productivity gap: Evidence from rice production

Published Date
April 2011, Vol.36(2):147–157, doi:10.1016/j.foodpol.2010.10.004

Title 
The impact of agricultural policy distortions on the productivity gap: Evidence from rice production

• Author 

Manitra A. Rakotoarisoa ^,

• Trade and Markets Division, Economic and Social Development Department, Food and Agriculture Organization of the United Nations, Room D-835, Viale delle Terme di Caracalla, 00153 Rome, Italy

Received 29 August 2008. Revised 21 May 2010. Accepted 4 October 2010. Available online 3 November 2010.

Abstract

This article explores how production and trade policy distortions affected rice productivity in 33 rice-producing countries. A rice-productivity index is constructed, and a model linking the productivity gap with policy distortions is presented. After controlling for the differences in infrastructure, access to inputs and equipment, openness, and human capital, this article shows that high levels of rice subsidies and protection in rich countries combined with taxation of rice farming in poor countries widened the gap in rice productivity between rich and poor rice countries.

Research highlights

► New crop productivity index using a different dynamic panel model was constructed. ► Indexes showed the gap in rice productivity between rich and poor countries widened. ► Rich countries subsidized while poor countries taxed their rice production and export. ► An econometric model linking productivity gap to policy distortions was presented. ► Rich countries’ subsidies, protection and poor countries’ tax widened productivity gap.

Keywords

• Agricultural policies
• Trade distortions
• Rice productivity

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