AGRICULTURAL LIBERALISATION AND THE LCDs 1277 © Blackwell Publishing Ltd 2005 © Blackwell Publishing Ltd 2005, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA 1277 Agricultural Liberalisation and the Least Developed Countries: Six Fallacies Arvind Panagariya Columbia University, New York 1. INTRODUCTION T ODAY, agriculture remains the most distorted sector of the world economy. The Uruguay Round Agreement on Agriculture took a major step forward by bringing the sector within the purview of the multilateral trading rules but its success in opening up the sector to global competition was at best limited. There- fore, agricultural liberalisation is rightly the top priority in the Doha negotiations. On that much there is general agreement among informed analysts. There remains considerable confusion, however, on who protects agriculture and how much, which countries stand to benefit from the liberalisation most, and whether there are potential losers and if so what might be done about it. Because many of the potential exporters of agricultural products happen to be developing countries and many potential importers developed countries, liberalisation in this area has an obvious North-South dimension. But beyond this simple generalisa- tion, the public-policy discourse remains fogged by a number of fallacies. These fallacies probably originated at the beginning of this millennium with the World Bank leadership (as distinct from its technical and research staff) – most notably the outgoing President James Wolfensohn and his former Chief Economist Nicholas Stern – filling the media waves with the allegations that agricultural protectionism was almost exclusively a developed-country problem, that this protection represented hypocrisy and double-standard on the part of the developed countries, that it hurt the poorest countries most, and that it constituted the principal barrier to the latter’s development. But today, the fallacies have been embraced more widely, including by the leadership of other international The author is grateful to Jagdish Bhagwati for comments on an earlier draft of this paper.