4 This disarray in world agriculture, as Johnson described it in the title of his seminal 1973 book, means there has been over-production of farm products in high-income countries and under-production in low-income countries. It also means there has been less international trade in farm products than would be the case under free trade, thereby thinning markets for these weather-dependent products and thus making them more volatile. Using a stochastic model of world food markets, Tyers and Anderson (table 6.14) found that instability of international food prices in the early 1980s was three times greater than it would have been under free trade in those products.

During the past 25 years, however, numerous countries have begun to reform their agricultural price and trade policies, typically as part of a broader reform agenda. That has raised the extent to which farm products are traded internationally, but not nearly as fast as globalization has proceeded in the non-farm sectors of the world’s economies.<sup>1</sup> To what extent have reforms of the past two decades reversed the above-mentioned policy developments of the previous three decades? Empirical indicators of agricultural price distortions (called Producer Support and Consumer Subsidy Estimates, or PSEs and CSEs) have been provided in a consistent way since 1986 by the Secretariat of the OECD (2008) for its 30 member countries. However, until now there have been no comprehensive time series rates of assistance to producers of nonagricultural goods to compare with those PSEs, nor do they tell us what happened in those advanced economies in earlier decades – which are of more immediate relevance if we are to see how the two groups of countries’ policies developed during similar stages of development. As for developing countries, almost no comparable time series estimates have been generated since the Krueger, Schiff and Valdes (1988) study, which covered the period 1960-1984 for just 17 developing countries plus Portugal.<sup>2</sup> An exception is a recent set of estimates of nominal rates of protection generated by the International Food Policy Research Institute (IFPRI) for key farm products in China, India, Indonesia and Vietnam since 1985 (Orden et al.). The OECD (2009) also has released PSEs for Brazil, China and South Africa as well as several other East European countries.

> 1 In the two decades to 2000-04, the value of global exports as a share of GDP rose from 19 to 26 percent, even though most of GDP is nontradable governmental and other services, while the share of primary agricultural production exported globally, including intra-European Union trade, rose from only 13 percent to just 16 percent (World Bank 2007 and FAO, as summarized in Sandri, Valenzuela and Anderson).

> 2 A nine-year update for the Latin American countries in the Krueger, Schiff and Valdés sample by the same country authors, and a comparable study of seven central and eastern European countries, contain estimates at least of direct agricultural distortions (see Valdés 1996; 2000). The Krueger, Schiff and Valdés (1991) chapters on Ghana and Sri Lanka have protection estimates back to 1955, as does the study by Anderson, Hayami and Others for Korea and Taiwan (and Japan, and much earlier in the case of rice).