Agricultural liberalization, poverty and inequality: Indonesia and Thailand

The effects of agricultural and general trade liberalization in Indonesia and Thailand are analyzed and compared using a multi-household, multi-sector integrated general equilibrium framework. In both countries agricultural protection contributes a relatively small part of the total cost of protection because when the protection is removed the gain in welfare is much smaller in the case of agricultural liberalization than across the board liberalization. In both countries the poor, urban and rural, have a strong interest in across the board liberalization of trade policy. The urban poor also have an interest in agricultural trade liberalization, but not the rural poor.