According to the GIDD, the world’s average monthly household income increases 0.3 percent after the removal of agricultural distortions, passing from an initial level of $207 to a final value of $208, 1993 PPP (see Table 4). Second, the reform has little impact on inequality at the global level. Although incomes rise in the agricultural and nonagricultural sectors alike, agricultural incomes increase by a little more than 1 percent whilst incomes in non-agricultural activities rise at the much lower rate of 0.2 percent. While this reduction in the non-agricultural income premium reduces inequality, Table 4 shows that income dispersion within the agricultural sector is also increasing, with the final change in global income distribution being close to zero. The distributional changes taking place within the agricultural sector are such that the incidence of extreme poverty (under 1 dollar a day, PPP) in this sector rises by almost 1 percentage point as a consequence of the elimination of agricultural trade distortions. On the other hand, poverty among non-agricultural households experienced a reduction equal to 0.36 percentage points. The combination of poverty changes occurring in and out of the agricultural sector ends up increasing global poverty by 0.4 percentage points, or 21 million additional individuals below the extreme poverty line. This result should be taken with caution since the poverty effect of the agricultural trade reform depends on where the poverty line is set. While global poverty measured by the 1 dollar a day poverty line shows a moderate increase of 0.18 percentage points as a consequence of the reform, when measured at 2 dollars a day, poverty reduces by 0.3 percentage points.

**Table 4: Simulated Global Poverty and Inequality and Changes w.r.t. Initial Levels**

|**Strata**|**Gini**<br>**(%)**|**Pop Shares**<br>**(%)**|**Average**<br>**Income**|**1-Dollar Poverty**<br>**Incidence(%)**|**Poverty Share**<br>**(%)**|
|---|---|---|---|---|---|
|**Agri**|44.9|44.8|65.4|31.7|75.9|
|**Non-Agri**|62.8|55.2|328.9|8.1|24.0|
|**Total**|67.0|1|210.8|18.7|1|
|**Change with r**|**espect the**|**observed (Simu**|**lated - Observ**<br>|**ed)**||
|**Agri**|0.5|-|1.2<sup>*</sup>|0.87|1.02|
|**Non-Agri**|-0.2|-|0.2<sup>*</sup>|-0.36|-1.02|
|**Total**|-0.1|-|0.3<sup>*</sup>|0.18|-|

* Changes in average income are expressed in percentage.

The results presented so far have treated the world as a single entity, making no distinction between regions or countries. Thus, lack of major changes at the global level could be the outcome of offsetting trends between regions. As discussed in Section 4.1, farmers in Latin America (LAC) are big winners from trade reform with an impressive increase of 16 percent in their household income. By contrast, incomes of farmers in South Asia (SA) shrink more than 3 percent after agricultural distortions are dismantled. In order to show the incidence of these changes among the population in the different regions, Figure 9 plots the GIC for Latin America, South Asia and the rest of the world. The GIC for Latin America shows that the agriculture-based growth in the region is highly pro-poor; on the contrary, South Asia’s reduction in agricultural incomes is highly regressive, with the poorest households losing from the reform. East Asia and, to a lesser 18