Poverty Impacts of Agricultural Trade Reforms

The impact of trade policy on poverty, food security and inequality in developing countries is at the centre of a crowded international debate on the role of international trade in development. Developing countries place great emphasis on assessing the distributional and food security consequences of trade liberalization and their domestic policy reform efforts. This chapter reviews much of this empirical evidence and examines the impacts of both unilateral domestic agricultural policy and trade reforms and multilateral trade liberalization on poverty. Food-insecure and poor households in developing countries are very diverse, and they are affected in different ways by agricultural trade reforms. While this discussion focuses most of its attention on how rural households respond to various trade reforms, to understand the impact of a given trade reform on national food security and poverty, the effect on urban households is equally important.