International markets, agriculture, poverty and inequality in Brazil

Abstract

Poverty alleviation is an important issue in international trade liberalization debates, as it has been included in the World Trade Organization negotiations agenda. However, currently, the question of the possible impact of international agricultural markets liberalization on poor populations is not definitively answered. Doubts also remains around the identification of the relevant public policies that could become necessary to reduce poverty and inequalities in a context of international free markets. These issues are crucial for Brazil, where the agricultural sector is of utmost importance in international negotiations and where high levels of poverty and inequality are persisting. In this context, the general objective of this proposal is to analyze if, and how, the opening of currently protected agricultural markets, through trade liberalization, could lead to poverty and inequity reduction in Brazil. The methodology is based on: (i) an empirical analysis of the impact of partial opening of some international markets or, more generally speaking, of the increasing insertion of some agricultural chains in international trade, on poverty and equity indicators in Brazil; (ii) the building of an Applied Interregional General Equilibrium Model and of its database, including a detailed representation of the agricultural sector; (iii) the formulation of future policy scenarios and the analysis of their impacts on the Brazilian economy, income distribution and poverty levels, resulting from the application of this model. (AU)