By Kym Anderson

Agricultural policy over much of the 20th century in rich industrial counties (excluding those with a strong agricultural advantage) has been characterized by increasing import protection and other government assistance to farmers relative to other producers. In developing countries, by contrast, newly independent governments from the 1950’s sought to provide important protection to manufacturers and often taxed the exports of agricultural products.

This paper focuses on two such developing countries, namely, China and India. They are important not just because they are the world’s most populous countries, comprising 38 percent of the world’s people and more than one-fifth of the global agricultural GDP, but also because they have moved away from being rather closed to being increasingly open to international trade (and investment in China’s case). The opening up has stimulated rapid industrialization and expanded exports of labor-intensive manufactures from these densely populated countries, but it has also imposed structural adjustment pressures on agriculture. To what extent is this creating pressure on the governments of these two countries to assist their farmers, and what role if any are commitments to the World Trade Organization constraining those governments from following the agricultural protection growth trend of earlier industrializers?

The paper begins with an examination of China, because it is the larger economy and changes there have been more dramatic, before comparing briefly its experience with that of India. The final section concludes by exploring the likely effects on these countries’ agricultural trade of (a) further multilateral trade reform under the Doha and subsequent WTO negotiating rounds, and (b) further domestic reform such as reducing public under-investment in rural human capital and infrastructure.
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