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In [[poor countries]] with low [[population densities]] and enough suitable land area, which includes most countries in Africa and Latin America, agriculture is central to the economy. In poor regions and rural areas within middle-income developing countries, the concentration of poverty in rural areas of otherwise better-off developing countries makes the development of agriculture vital there. Finally, in Net Food Importing Developing Countries (NFIDCs), there is a positive link between growing agricultural exports and increases in local food production, which makes agricultural development if anything even more important, as [[food security]] and the financial stability of the government are also at stake. In [[Vietnam]] in the 1990s, increases in production and export of coffee of 15% a year contributed to a nearly 50% rise in food production in the same period. As agricultural GDP grew 4.6% per year, [[rural poverty]] fell from 66% in 1993 to 45% in 1998 (Global Economic Prospects 2002:40).
Anderson et al. (1999) estimate annual [[welfare spending|welfare]] losses of $19.8 billion for developing countries from agricultural tariffs – even after [[Uruguay Round]] reforms. This is three times the loss from [[OECD]] import restrictions on textiles and clothing. A combination of better market access, and domestic reforms and foreign aid to enhance the ability of developing countries to take advantage of it, could have a significant impact on poverty reduction, and help to meet the [[Millennium Development Goals]].
The largest beneficiaries of agricultural [[economic liberalization|liberalization]] would be OECD countries themselves: welfare losses of $62.9bn a year are estimated as resulting from the distortionary policies (Binswanger and Ernst 1999:5). Nor is the traditional objective of OECD [[agricultural subsidy]] (supporting small farmers) achieved by this system in a manner that could be characterised as efficient: most of the producer support incomes goes to better-off farmers, with the poorest 40% receiving just 8% of the support spent.
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