Implications of the US Farm Bill of 2002 for agricultural trade and trade negotiations

The US Farm Bill of 2002 is the latest in a 7-decade history of farm subsidy laws that transfer funds to farmers and regulate and subsidize production of selected commodities. Fruit, tree nut, ornamental and vegetable crops, hay and meats remain outside scope of main subsidy programs. The new law continues many innovations of the 1996 Act, such as removal of authority for annual land idling and crop price floors accompanied by government stockholding. Government payments remain the primary focus of commodity programs. The total amount of these payments are likely to remain similar to the amount paid in the period 1999–2001, but with some changes in the form of the programs. For example, allowing owners to update acreage and yield payment bases creates additional incentives for farmers to link current planting decisions to anticipated farm subsidies. Similarly, the new program that ties “counter-cyclical” payments to the price of a specific crop also has production stimulus. A new program, estimated to add about 5–10 per cent to marginal milk revenue for smaller farms, makes ‘deficiency’ payments to dairy farms when milk prices are low. Despite the new programs with added links to stimulating production, new USA programs stimulate production only marginally more than the subsidies of the 1999–2001 period, which were replaced. Furthermore, the USA has flexibility to avoid explicitly violating its WTO commitments. Nonetheless, this US Farm Bill of 2002 has curtailed the previous trends toward lower farm subsidies and smaller production stimuli, and the negative publicity surrounding it has made negotiating reductions of farm trade distortions more difficult.Agricultural and Food Policy, International Relations/Trade,

Modeling Staple Food Consumption: Measuring the Trade Effect on Food Security for Chinese Grain Farmers

This paper derives a simulation model that examines the food security of the grain producing households in China in an open border model regime. We define a food inadequacy index (F.I.) to measure the change of the food security status under alternative scenarios of border liberalization for the households. We conclude that if opening the border of grain market is followed by a more variable grain price distribution, the food security status will deteriorate for the low-income households on average. However, if border liberalization is followed by a decrease in mean of the price distribution, even with a more variable distribution, the food security status improves.International Relations/Trade,

Partly melted DNA conformations obtained with a probability peak finding method

Peaks in the probabilities of loops or bubbles, helical segments, and unzipping ends in melting DNA are found in this article using a peak finding method that maps the hierarchical structure of certain energy landscapes. The peaks indicate the alternative conformations that coexist in equilibrium and the range of their fluctuations. This yields a representation of the conformational ensemble at a given temperature, which is illustrated in a single diagram called a stitch profile. This article describes the methodology and discusses stitch profiles vs. the ordinary probability profiles using the phage lambda genome as an example.Comment: 11 pages, 9 figures; v3: major changes; v4: applications sectio

The Effect of the Northeast Dairy Compact on Producers and Consumers, with Implications of Compact Contagion

Balagtas andSumnermodel and measure the effects of the Northeast Dairy Compact on prices, quantities, and producer and consumer welfare, underscoring the distribution of these effects across regions and among producer and buyers. Using 1999 as a base year, simulations show that the Compact raised the farm price of milk in the Northeast by $0.45/cwt., lowered the farm price of milk in the rest of the country by$0.02/cwt., and transferred income from producers outside the Compact region and buyers in the Compact region to producers in the Compact region. Non-Compact producer losses exceeded Compact producer gains. Similar results are found for a scenario of Compact contagion, extension of the Compact to include additional states. In both cases, the Compact changed the distribution of the costs and benefits of price discrimination as practiced by milk marketing orders. The implication is that the regional distribution of the Compact's welfare effects raises again the question of the organization of a government-sponsored milk marketing plan such as the federal milk marketing order system.Health and Safety, Regulatory Reform

Domestic Support Reform? A Closer Look at EU Policies Applied to Processed Fruits and Vegetables

Recent trade negotiations have attracted much attention to the consequences of domestic support applied to agricultural markets. In various markets, researchers have examined the economic effects of regimes and scenarios with less, or different forms of, domestic support including decoupled payments. Here we examine the domestic support regimes for processed fruits and vegetables in the European Union (EU) where major policy changes were applied in 2001 and again in 2008. The changes were billed as policy “reform” but no analysis has yet evaluated quantitatively the nature of what was reformed and what was not. A simulation model is used here to assess the price, production, and welfare effects of policies that have been applied to the EU processing tomato industry. Our results indicate that EU domestic support has increased EU tomato production by 7 to 12%, decreased production in other regions by 3 to 5%, and distorted the processing tomato market most during the period between 2001 and 2007.agricultural policy reform, domestic support, horticultural markets, European Union, Common Agricultural Policy, processing tomatoes, simulation analysis, Agricultural and Food Policy, Q18,

ANALYSIS OF RECENT OPTIONS FOR CHANGES IN U.S. DAIRY POLICY

Agricultural and Food Policy,

A STATIC POLICY FOR A DYNAMIC INDUSTRY: THE CALIFORNIA YOUNG ACT OF 1935

An economic history of the development of California dairy policies from 1935 to 1965 is used to support the hypothesis that the incompatibility of discrete policy changes for a dynamic industry generates deadweight losses. Combining quantitative industry data with legal and personal narratives provides evidence in support of the hypothesis.dairy policy, quota, agricultural history, Agricultural and Food Policy,

Spatially Explicit Estimates of Crop Rotation Responses

Crop Production/Industries, Environmental Economics and Policy, Land Economics/Use,

THE TRADE RESTRICTIVENESS INDEX: THE POTENTIAL CONTRIBUTION TO AGRICULTURAL POLICY ANALYSIS

In the policy arena, there is a demand for "trade distortion indicators", but many of the traditional indices are difficult to compute and interpret. Recent developments in the literature have led to a new indicator: the Trade Restrictiveness Index (TRI). This paper analyzes some problems related to the TRI's computation and interpretation. We argue that the index is theoretically well grounded and offers potential for measuring the relative importance of agricultural policy distortions. However, the name of "trade restrictiveness" index is seriously misleading, since the TRI does not provide a measure of trade flows restrictions.Agricultural and Food Policy, International Relations/Trade,

Domestic support and the WTO negotiations

In their attempt to maximise trade benefits, agricultural trade negotiators must allocate scarce resources and consider trade‐offs across issues such as liberalising foreign border measures or reducing foreign domestic subsidies. Analysis and examples support the notion that more liberalisation will be achieved in the new WTO round by emphasis on lowering border barriers and export subsidies rather than attempting to discipline domestic farm subsidies directly. Analyses of EU grain policy, Korean rice policy and US sugar policy show how reduced export subsidy or more import access have substantial trade benefits, even if farmers are compensated with payments or price supports.International Relations/Trade,