Chapter 8: The Effect of Trade Liberalization on the Sustainability of Agricultural Sectors in Egypt and Tunisia: A New Framework Based on TFP Growth Structure
The impact of agricultural trade liberalization on economic growth, poverty and inequality in developing countries has always been an important issue in the debate concerning international trade and development policy analysis. Several international development agencies and organizations involved in trade policy and poverty reduction have recently allocated substantial resources to analyse this issue (Ali and Talukder 2010). In developing countries of the MENA (Middle East and North Africa) region, agricultural trade reforms could affect agriculture productivity in different ways according to the level of farmers involvement in international trade. A number of studies have been carried out in the ?ield of agricultural trade liberalization and its impacts; but the combined focus on policy measures, agricultural growth, food security and farmers income distribution has not been clearly addressed. Current poverty and vulnerability in the MENA dryland region has been exacerbated by low productivity of natural resources, including less favourable agro-climatic conditions. The consequent marginal status of these areas has led, most of the time, to their overall neglect re?lected through permanent under-investment and generally inappropriate development interventions. Therefore, increasing agriculture productivity is considered as one of the most fundamental ways to ensure food security and promote farmers income mainly in these marginalized areas. Despite the fact that agricultural productivity in the MENA has been recently given extensive attention, few studies have examined the agricultural growth sustainability in these countries. Sustainability in agricultural growth is highly important to investigate future development of agricultural sectors in MENA countries. Moreover, whether trade openness and domestic investment (public and private) policy which, among other factors, are used to promote agricultural Total Factor Productivity (TFP) growth could also play a great role in the sustainability of such growth is rarely examined.