Gabriela García Merchán is the recipient of the Patricia Murillo Montesdeoca Scholarship and she has won the Thomas Cottier Award for Best Thesis!

Gabriela García Merchán’s (MILE 22) “Agricultural Subsidies in the Economy of Ecuador – An Assessment of Impact Through CGE Modelling” has won the Thomas Cottier Award for Best Thesis.

The award was set up to honour Prof. Emeritus Thomas Cottier's leadership and vision. 

Since Gabriela is also the recipient of the Patricia Murillo Montesdeoca (PMM) Scholarship, the joy for the World Trade Institute and the Global Impact Association is twofold as it demonstrates the high impact that a scholarship can have on changing a person's life. 

After leaving the public sector, Gabriela is ready for the next stage in her career, eager to contribute with her experience and the knowledge acquired at the WTI.

Thesis summary

Gabriela explores agricultural subsidies and their effects, focusing on Ecuador's economy. Agricultural subsidies, aimed at supporting farmers and rural economies, have varying impacts on productivity, trade, and the environment. Researchers propose "green box" subsidies, less distorting and more environmentally friendly than "amber box" subsidies, as alternatives to reform the system.

Using a CGE model, the study compares two subsidy scenarios in Ecuador. Scenario 1 applies various subsidies at OECD levels, showing mixed effects on prices, output, and trade balance, yet positive GDP and income outcomes. Scenario 2 focuses on green box subsidies, achieving better results in terms of prices, trade, and output, particularly for higher value-added products.

Recommendations suggest targeted subsidies for small and medium-sized producers, improving equity and efficiency. Scenario 2, while costlier, encourages production diversification and simplifies implementation. The study emphasizes the complexity of subsidy design, highlighting the importance of tailored approaches considering unique economic and social contexts.

Ultimately, the research underscores the complexity of subsidy reform, acknowledging that a single approach cannot address all economic goals. The study provides insights for policymakers, analysts, and professionals seeking to transition from distorting to environmentally friendly subsidies, emphasizing the significance of context-specific research in achieving sustainable agricultural support.