Introduction to State Trading in Agriculture

by Karen Z. Ackerman and Praveen M. Dixit

State trading enterprises are far more prevalent in agriculture than in other industries. STEs account for significant shares of world trade in grains, dairy products, and sugar. Attempts to measure the impacts of STEs and their activities on international agricultural trade have just begun. This report presents a classification scheme for STEs that provides a qualitative index of an STE's ability to control domestic markets and its ability to influence external trade. We applied the classification scheme to nine major agricultural STEs and concluded that only a few of them are able to affect international trade substantially. Recent policy reforms have eroded some of the nine's powers to influence trade.

Keywords: state trading, world trade, international trade, policy, domestic prices

In this publication...

• Entire Report
• Introduction
• I. What Is State Trading?
• II. How Prevalent Is State Trading in Agricultural Trade?
• III. Why Do Countries Pursue State Trading of Agricultural Products?
• IV. Evaluating the Market Impacts of STEs
• V. Ranking STEs with Respect to Their Capacity To Distort Trade
• VI. Future Research Directions
• References
• Appendix B: STEs Reported to the WTO in 1995 and 1996
• Appendix A: STEs in the GATT
• Appendix C: Complexities in Analyzing State Trading Practices