INTERVENTIONS AND PRODUCTION SECTOR WASTE IN LDC AGRICULTURE

Recent studies have revealed that less developed countries (LDCs) have been taxing their agricultural sectors at rates of 40-50%. This study uses quantity-based general equilibrium measures of deadweight loss to evaluate the cost of these distortions in 18 of these countries. The Allais-Debreu loss measures indicate that from 7-16% of either output or of the agricultural resource base has been wasted due to the associated misallocation of agricultural inputs across these countries.