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ABSTRACT: We analyse the impact of trade liberalisation, removal of production subsidies and elimination of consumption distortions in world sugar markets using a partial-equilibrium international sugar model calibrated on 2002 market data and current policies. The removal of trade distortions alone induces a 27% price increase while the removal of all trade and production distortions induces a 48% increase in 2011/2012 relative to the baseline. Aggregate trade expands moderately, but location of production and trade patterns change substantially. Protectionist Organisation for Economic Co-operation and Development (OECD) countries (the EU, Japan, the US) experience an import expansion or export reduction and a significant contraction of production in unfettered markets. Competitive producers in both OECD countries (Australia) and non-OECD countries (Brazil, Cuba), and even some protected producers (Indonesia, Turkey), expand production when all distortions are removed. Consumption distortions have marginal impacts on world markets and the location of production. We discuss the significance of these results in the context of mounting pressures to increase market access in highly protected OECD countries and the impact on non-OECD countries.
Journal of Agricultural Economics 02/2006; 57(1):23 - 48. · 1.55 Impact Factor
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ABSTRACT: This paper analyzes policies affecting global groundnut-products markets. The new US groundnut policy is now a minor source of distortion in world markets where India and China stand out as the major distorters. We analyze and quantify the effects of groundnut-products trade liberalization on consumer welfare and producer income. Our analysis shows that African exporters would gain significantly from reductions in protection and subsidies in India, and to a lesser extent, China, although China’s exports of food-quality groundnuts would expand dramatically. Net-importing OECD countries would suffer from higher world prices. The paper draws direct implications for the Doha trade negotiations.
World Development. 02/2006; 34(6):1016-1036.
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ABSTRACT: We analyse the impact of trade liberalisation, removal of production subsidies and elimination of consumption distortions in world sugar markets using a partial-equilibrium international sugar model calibrated on 2002 market data and current policies. The removal of trade distortions alone induces a 27% price increase while the removal of all trade and production distortions induces a 48% increase in 2011/2012 relative to the baseline. Aggregate trade expands moderately, but location of production and trade patterns change substantially. Protectionist Organisation for Economic Co-operation and Development (OECD) countries (the EU, Japan, the US) experience an import expansion or export reduction and a significant contraction of production in unfettered markets. Competitive producers in both OECD countries (Australia) and non-OECD countries (Brazil, Cuba), and even some protected producers (Indonesia, Turkey), expand production when all distortions are removed. Consumption distortions have marginal impacts on world markets and the location of production. We discuss the significance of these results in the context of mounting pressures to increase market access in highly protected OECD countries and the impact on non-OECD countries. Copyright 2006 Blackwell Publishing Ltd.
Journal of Agricultural Economics. 02/2006; 57(1):23-48.
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Jacinto Fabiosa, John Beghin,
Stephane De Cara,
Amani
Elobeid,
Cheng Fang,
Murat Isik,
Holger
Matthey,
Alexander Saak,
Pat Westhoff,
D. Scott
Brown,
Brian Willott,
Daniel Madison,
Seth
Meyer,
John Kruse
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ABSTRACT: We investigate the impacts of multilateral removal of all border taxes and farm programs and their distortions on developing economies, using a world agriculture partial equilibrium model. We quantify changes in prices, trade flows, and production locations. Border measures and farm programs both affect world trade, but trade barriers have the largest impact. Following removal, trade expansion is substantial for most commodities, especially dairy, meats, and vegetable oils. Net agricultural and food exporters emerge with expanded exports; net importing countries with limited distortions before liberalization are penalized by higher world prices and reduced imports. We draw implications for current World Trade Organization negotiations.
Review of Agricultural Economics. 02/2005; 27(3):317-335.
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ABSTRACT: Major issues and challenges encountered in modeling and analyzing agricultural and trade policy reforms are reviewed. We focus on modeling approach, and pay special attention to the type and scope of models, calibration of a realistic baseline scenario, representation of the reform agreement, use of extramodel information, choice of metrics to measure reform impacts, and emerging issues in policy modeling. Existing solutions and unresolved issues are examined. We stress the complementarity of various modeling approaches in assessing policy reforms and the importance of helping users understand the limitations of the chosen approach.
Journal of Agricultural & Applied Economics. 02/2004; 36(2):383-393.
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ABSTRACT: We analyze the impact of China's accession to the World Trade Organization on major crop and livestock markets using the Food and Agricultural Policy Research Institute (FAPRI) modeling framework. We incorporate expected changes in consumer income, textile production, and trade policies as exogenous shocks to the baseline model. Following accession, revenues decline in China's livestock, grain, and oilseed industries, while cotton production prospers despite increased imports. Chinese consumers benefit from lower food prices, with vegetable oil, dairy, and meat consumption increasing significantly. Argentina, Brazil, Canada, the European Union, and the United States are the greatest beneficiaries from expanded agricultural trade with China. Copyright 2003 American Agricultural Economics Association
Review of Agricultural Economics. 01/2003; 25(2):399-414.
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06/2002;
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American Journal of Agricultural Economics 02/2002; 84(3):768-73. · 1.17 Impact Factor
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09/2001;
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Bruce A. Babcock, John Beghin,
Michael Duffy,
Hongli Feng,
Brent Hueth,
Catherine L. Kling,
Lyubov Kurkalova,
Uwe Schneider,
Silvia Secchi,
Quinn Weninger,
Jinhua Zhao
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ABSTRACT: As Congress develops new farm legislation, some are lobbying for a new partnership between U.S. taxpayers and farmers. In exchange for an annual transfer of $10 to $20billion from taxpayers to agriculture, farmers would do much more to enhance environmental quality. An attractive feature of a new partnership is that paying for an improved environment provides a clear and justifiable rationale for farm program payments, something that is lacking under current farm programs. By changing management practices and land use, farmers can provide cleaner water, cleaner air, better wildlife habitat, lower net greenhouse gas emissions, and improved long-run soil quality. Private profit maximizers largely ignore the value of these environmental goods. Hence, the goods are underprovided. Having government step in to increase their supply may increase economic efficiency. New, highly funded conservation payment programs for agriculture could achieve both the current income support objective of farm programs as well as environmental objectives if program payments are targeted to achieve environmental benefits rather than targeted to low-income producers. Significant reductions in environmental benefits will occur if payment limits or means testing is used to target payments, unless low-income farmers provide the highest environmental benefits. For many farms, the potential quantity of environmental benefits that can be produced is proportionate to farm acreage. The two basic approaches to conservation payments are (1) voluntary programs that pay farmers for specific actions they take, and (2) programs that penalize farmers with taxes or disqualification from other program benefits if prescribed actions are not followed. The first approach is preferred if agricultural income enhancement is a goal. Also, it is doubtful that the second approach is political feasible given that farmers will be asked to give up the “no strings” income support they have enjoyed in recent years. Past co
07/2001;
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06/2001;
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Bruce A. Babcock, John Beghin,
Frank H. Fuller,
Jacinto Fabiosa,
Cheng Fang,
Chad Hart,
Holger Matthey,
Stephane De Cara,
FAPRI Staff,
University of Missouri,
Columbia
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ABSTRACT: Senator Tom Harkin asked the Food and Agricultural Policy Research Institute (FAPRI) to evaluate a uniform 10 percent reduction in program crop acreage in the United States. Following the request, FAPRI analyzed the effects of this reduction on price, trade, consumption, and production in the eight program-crop markets and all related markets. FAPRI investigated both the domestic and international implications of this reduction in U.S. planted area. In particular, FAPRI analyzed whether a decrease in U.S. production would be accommodated by a decrease in domestic use and inventories and corresponding changes in foreign production, use, and inventories.
06/2001;
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Bruce A. Babcock, John Beghin,
Frank H. Fuller,
Samarendu Mohanty,
Jay Fabiosa,
Phillip Kaus,
Cheng Fang,
Chad Hart,
Holger Matthey,
Stephane DeCara,
Karen P. Kovarik,
FAPRI Staff,
University of Missouri,
Columbia
05/2001;
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ABSTRACT: We analyse the consequences on agricultural markets of enlargement of the European Union (EU) to include the Czech Republic, Hungary, and Poland. We produce a market outlook up to 2010 for two enlargement scenarios assuming different policy restrictions on grain and dairy production in the acceding countries. Accession of the three Central and Eastern European countries (CEECs) leads to a permanent but moderate decrease in EU prices for most commodities. In the three acceding CEECs, domestic prices increase drastically, final consumption of agricultural products decreases in most instances, while production increases. Higher domestic prices in the CEECs reduce exports of most commodities to non-union countries. Consequently, excess supplies are placed in stocks or exported to the original 15 member countries. Supply management mechanisms in the dairy and grain sectors would reduce the build-up of surpluses in the new member states, but limit their ability to take advantage of the expanded market. Accession of the three CEECs would increase the CAP budget over its proposed maximum if area payments are extended to incoming crop producers.
01/2001;
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10/2000;
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09/2000;
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Bruce Babcock,
Catherine Kling,
John Miranowski,
Dermot Hayes,
Neil E. Harl,
Charles A. Pieper,
Sergio Lence,
Michael Duffy,
Mark A. Edelman, John Beghin,
Brent Hueth,
Jinhua Zhao,
Christopher Azevedo,
Joseph Herriges
07/2000;
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06/2000;
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04/2000;
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ABSTRACT: Using a world agricultural model, we analyze the impact on dairy markets of the Berlin Accord on the European Union (EU) Common Agricultural Policy (CAP) Reforms. We also investigate the consequences of enlargement of the EU to include the Czech Republic, Hungary and Poland for the same markets. We produce a market outlook up to 2010 for these two scenarios. The Berlin Accord induces lower EU milk and dairy prices. A change in relative prices between cheese and butter-skim milk powder (SMP) occurs after 2005 and induces an expansion of cheese production, consumption and exports at the expense of the butter–SMP sector. Accession of the three central and eastern European countries (CEECs) leads to a permanent but moderate decrease in EU prices of milk and dairy products. For the three acceding CEECs, domestic prices increase dramatically. Their final consumption of milk decreases and dairy product consumption drops considerably. The derived demand of milk in dairy production increases, however, because of the higher prices for dairy products, benefiting dairy producers in these CEECs. Dairy exports of the three acceding countries to the EU–15 increase by one to three orders of magnitude, despite building large inventories. The impact of accession on world markets is small.
02/2000;
