Trade Liberalization in Agriculture

Some general points may be borne in mind when examining the experience of any one country with respect to trade liberalization and agriculture, as well as specific mechanisms that generate links between trade policies and pattern of incidence of poverty. Better trade performance is often viewed as an end in itself, but of course, it is only desirable if it leads to higher and sustained economic growth and poverty reduction. It has been noted that trade strategies per se are probably less significant in determining actual trade and growth performance, than an overall development strategy on the part of the government. Of course, any trade strategy implicitly or explicitly involves some industrial strategy as well – even a completely “liberal” trade policy which relies upon unregulated markets to deliver outcomes essentially involves a particular approach towards industrial development. Trade policies are also closely related to resource mobilisation and investment strategies. A systematic approach of the state towards the economic growth process, that seeks to provide a stable economic environment and encourage certain forms of growth, necessarily means a certain attitude towards external trade as well, which is critical in determining domestic production structure.