Betting the farm on high food prices: A consumer based approach to agriculture protection

Our question is quite simple: If agriculture protectionism is a product of economic development, why is agriculture protected at such varying degrees by otherwise similarly developed countries? Previous attempts to fit agriculture into general models of trade policy formation have relied exclusively on producer demand for protection and merely assume the associated demand for lower prices that might come from consumers. Not surprisingly, these previous studies add only minimally to this strange phenomenon. Our method turns this approach on its head by modeling the political strategy of agriculture protection on the costs incurred by the consumer. Taking both producers and consumers into account more accurately reflects the intent of extant theoretical models of protectionism. Our results show that using the consumer as the dependent variable provides more robust results on common independent variables. Recent global events show that consumer disapproval of agriculture policies should not be underestimated by political scientists or politicians.

► Understanding of agriculture protection not limited to the “development paradox”.
► Consumer-based dependent variables provide more robust results than producer-based.
► Policy Recommendation: lower food costs provides leaders more stability.
► Models of trade protection yield more understanding of agriculture than previously thought.