Distortions in farmer prices since the 1950s: South Africa in international perspective

Abstract

For decades, earnings from farming in many low-income countries have been depressed by a pro-urban bias in own-country policies, as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies reduce national and global economic growth. They also add to inequality and poverty in developing countries, since most of the world’s billion poorest people depend on farming for their livelihood. Over the past two decades numerous developing country governments have reduced their sectoral and trade policy distortions, while some high-income countries also have begun reforming their protectionist policies. Drawing on results from a new multi-country research project, this paper examines the extent of South Africa’s reforms relative to those of other temperate-zone Southern Hemisphere countries, of Northern Hemisphere rich countries, and of other developing countries. It concludes by pointing to the scope and prospects for further pro-poor policy reform at home and abroad.