Public policy and competitiveness in agriculture

Abstract

ln the last three decades the agricultural sector of the less developed countries has lost competitiveness. The strong agricultural policy would explain the gain in the most developed countries. Their agricultural policy didn’t change, even when the government adopted a liberal strategy. Only European Union has demonstrated gains in competitiveness during all of the time. If we consider that at the beginning it showed the worst situation in terms of comparative advantage, we can conclude that its Common Agricultural Policy has caused big trade diversion and contributed to the reduction of the world economic efficiency.

JEL Classification: F14; F13.