Value Adding Pathways in Agriculture and Food Trade: The Role of GVCs and Services

Jared Greenville, Kentaro Kawasaki and Marie-Agnès Jouanjean
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Jared Greenville: OECD
Kentaro Kawasaki: OECD

No 123, OECD Food, Agriculture and Fisheries Papers from OECD Publishing

Abstract: Global value chains (GVCs) in agriculture and food sectors have the potential to influence trading relationships and the gains from trade for different sectors along the value chain. This report explores the way in which value from trade and GVC participation is created for the agriculture sector. It examines differences in returns to the sector from participation in GVCs and trade either directly in contrast to participation that relies on downstream domestic processing. The study makes use of a database on trade in value added for 22 agro-food sectors derived from the Global Trade Analysis Project (GTAP) database. The evidence presented in this paper suggests that aggregate value to the agriculture and to the economy overall from direct participation in trade and GVCs generates at least as much value as participation that relies on domestic downstream processing. Similar overall gains from primary exports are associated with greater volumes and the value created from ‘value addition’ to these exports – the embodied service and other inputs. Indeed, countries that specialise in primary exports have higher shares of service value added in these exports, with this also being a determinant of value growth for middle-income countries.

Keywords: agricultural trade; GTAP; Multi-regional output (search for similar items in EconPapers)
JEL-codes: F14 F60 Q17 (search for similar items in EconPapers)
Date: 2019-02-19
New Economics Papers: this item is included in nep-agr and nep-int
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Citations: View citations in EconPapers (3)

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