An Economic Analysis of the Impacts of Trade Liberalization on Asian Dairy Market

The objective of this paper is to develop an economic analysis of the impacts of further trade liberalization on Asian dairy markets. In order to achieve this, we first make a review of Asian dairy policies from the perspective of domestic support, market access and export subsidy. Then a world dairy model is employed, which reflects both vertical and spatial characteristics of the world dairy sector. We analyze the separate and combined impacts of eliminating Japan's domestic dairy subsidy, removing other Asian countries dairy trade policies excluding Japan, eliminating all Asian countries domestic dairy and trade policies, and multilateral dairy trade liberalization around the world. We find that Japan and Korea's producers will suffer much bigger losses from trade liberalization than other countries in the region; Japan and Korea's producers get much more protection from trade distortions than from domestic subsidy; India is a potential competitive exporter in Asia and the world; China is a potential importer in Asia but a potential competitive exporter in the world; South East Asia and other South Asian countries are potential importers in Asia and the world; greater trade liberalization around the world will help to increase exports for potential exporters and/or ease importing pressure for potential importers; the order of competitiveness of Asian economies from least competitive to most competitive is Japan, Korea, South East Asia, other South Asia, China and India; China and India consumers will lose from world trade liberalization, but the other countries consumer surplus will increase.

World Agriculture and Climate Change: Economic Adaptations

Recent studies suggest that possible global increases in temperature and changes in precipitation patterns during the next century will affect world agriculture. Because of the ability of farmers to adapt , however, these changes are not likely to imperil world food production. Nevertheless, world production of all goods and services may decline, if climate change is severe enough or if cropland expansion is hindered. Impacts are not equally distributed around the world.climate change, world agriculture, Environmental Economics and Policy,

Journal of International Agricultural Trade and Development, Volume 5, Issue 2

Table of Contents: (1) Young, Linda: "Introduction: Capacity Building and Agricultural Trade Policy Challenges in Developing Countries," pp. 171-174; (2) Young, Linda M. "Capacity Building Programs in Agricultural Trade Policy," pp. 175-184; (3) Salam, Abdul: "Distortions in Incentives to Production of Major Crops in Pakistan: 1991-2008," pp. 185-208; (4) Karim, Imad Eldin Elfadil Abdel, and David Abler: "Sudan's Proposal to Accede to the WTO: Impacts on Agricultural Markets," pp. 209-226; (4) Weerahewa, Jeevika, and Karl Meilke: "South Asian Trade Integration: The Welfare Implications of Export Taxes," pp. 227-254; (5) Miranda, Silvia Helena Galvao, and Geraldo Sant'Ana de Camargo Barros: "The Application of Intervention Models to Non-Tariff Trade Barriers: A Case Study of Brazilian Beef Exports," pp. 255-272; (6) Echeverria, Rodrigo, Munisamy Gopinath, Victor Moreira, and Pedro Cortes: "The Export-Production Decision of Chilean Farmers: The Case of Blueberry Producers," pp. 273-289.International Trade, International Development, Agricultural Policy, Agricultural and Food Policy, International Development, International Relations/Trade,

Impact of changes in ocean freight rates on United States rice exports

The direction and magnitude of the future world rice market is of vital consideration for the rice industries of both exporting and importing countries. Many studies have analyzed the international rice trade; however, there has been no published research that attempted to examine the effects of ocean freight rates on international rice trade. The major objective of this study was to analyze the effects of ocean freight rates on the flows, supplies, demands, and prices of world rice shipments. A reactive programming model, within a spatial equilibrium analysis framework, was developed to obtain equilibrium level estimates of the variables mentioned above, to investigate the competitive position of major rice exporting countries, and to evaluate the effects of ocean freight rates in four different scenarios. The 1990 calendar year was used as the base year for the analysis. Optimum shipping patterns of rice exports from the U.S. to world markets in 1990 was obtained to compare with models of the four different mentioned scenarios. The results show that the competitive position of the U.S. rice industry would be reduced from its actual level in the world rice market under some trade conditions. That is, the U.S. rice industry would lose its export volumes under an optimum minimum cost trade market structure, while the position of U.S. competitors, such as China, Vietnam, and Thailand, would improve significantly. Also, the U.S. cargo preference policies did little to affect the world rice trade market structure. Likewise, the results indicated that even when ocean freight rates have an important influence on the international rice trade, its effect is significantly different in each exporting country. China would be the most sensitive country to changes in ocean freight rates, not only in terms of its level of exports, but also in terms of the configuration of its rice trade pattern. Vietnam and Thailand rice exports and trade patterns also would respond significantly to changes in ocean freight rates, while the response of the U.S., in the same terms, could be considered relatively minor. Changes in ocean freight rates are not recommended policies to enhance the competitive position of the U.S. rice industry. Other issues of policy, such as support to rice production and exports, and price policy, could be considered as more influential mechanisms to help the U.S. rice industry

Obstacles to trade in the Pacific area: Proceedings of the Fourth Pacific Trade and Development Conference

The Fourth Pacific Trade and Development Conference was held in Ottawa, Canada, on October 7 to 10, 1971. The Conference program was outlined in the late summer of 1970, but it proved particularly topical in the wake of the currency and trade crisis following August 15, 1971. Although the realignment of currencies agreed in December has eased international monetary relationships, trade problems remain. Especially in the Pacific area, the potential of trade as an engine of economic growth and as a basis for constructive political relationships is difficult to overemphasize. The mutuality of interests in international trade between the developed countries of the region is well known. Of increasing importance is the export potential and performance of developing countries in South and East Asia. The future record of industrially advanced countries in reduction or control of barriers to trade affecting developing countries' exports will test the sincerity of many who have professed to favour the liberalization of trade as a stimulus to development. The willingness and ability of developed countries to adjust their industrial structure will be the major theme of the Fifth Trade and Development Conference scheduled for Tokyo in January, 1973. The Canadian host committee of the Fourth Conference in releasing the proceedings of the Conference wish to express appreciation to all those who have made possible the success of the Conference and the preparation of this volume. In particular, we wish to thank the public and private financial supporters in Australia, Canada, Japan, and the United States whose assistance has been essential. We also wish to thank those students, faculty, and staff members at Carleton who helped with local arrangements and the editing and preparation of the proceedings. The main responsibility for the latter task rested on Tom Burlington, who has recently gone to Japan to take up employment with the International Development Center of Japan

Global Agricultural Trade and Developing Countries

Global Agricultural Trade and Developing Countries explores the outstanding issues in global agricultural trade policy and evolving world production and trade patterns. This book presents research findings based on a series of commodity studies of significant economic importance to developing countries. Setting the stage with background chapters and investigations of cross-cutting issues, the authors describe trade and domestic policy regimes affecting agricultural and food markets and analyze product standards and compliance costs and their effects on agricultural and food trade. They then examine the impact and effectiveness of preferences and review the evidence on attempts to decouple agricultural support from agricultural output. Finally, they assess the potential gains from global liberalization in agricultural and food markets, and their sensitivity to various assumptions. Within this broad context of global agricultural policies and reforms, the authors then present detailed studies of commodity markets that feature distorted policy regimes among industrial and developing countries or that are important contributors to exports of developing countries. The commodities analyzed are sugar, dairy, rice, wheat, groundnuts, fruits and vegetables, cotton, seafood, and coffee. These commodity studies analyze current policy regimes in key producing and consuming countries, document the magnitude of these distortions, and estimate the distributional impacts-winners and losers-of trade and domestic policy reforms as well as their impact on trade flows and production location. Global Agricultural Trade and Developing Countries will aid policymakers and researchers in approaching global negotiations and in evaluating domestic policies on agriculture. This book compliments the findings of Agriculture and the WTO: Creating a Trading System for Development.

Journal of International Agricultural Trade and Development, Volume 6, Issue 1

Table of Contents: (1) Meyers, William H., Patrick Westhoff, Jacinto F. Fabiosa, and Dermot J. Hayes: "The FAPRI Global Modeling System and Outlook Process," pp. 1-20; (2) Meyer, Seth, Julian Binfield, and Patrick Westhoff: "Interactions between Energy Markets and Agriculture in the U.S.: A Stochastic Approach," pp. 21-40; (3) Han, Suk Ho, and Dae Seob Lee: "Impacts of the Korea-U.S. FTA: Application of the Korea Agricultural Simulation Model," pp. 41-60; (4) Strauss, P.G., and F.H.Meyer: "Combining Stochastic Modeling Techniques with Scenario Thinking for Strategic and Policy Decisions in Agriculture," pp. 61-82; (5) Hanrahan, Kevin, Trevor Donellan, and Frederic Chantreuil: "Agricultural Policy Change in the EU: Analyzing the Impact at member State and Aggregate EU Levels," pp. 83-100; (6) Moss, Joan, Myles Patton, Julian Binfield, Lichun Zhang, and In Seck Kim: "FAPRI-UK Modeling: Regional Responses to European Policy Incentives," pp. 101-116; (7) Thompson, Wyatt: "Biofuel Effects on Markets and Indirect Effects on Land Use and Food," pp. 117-132; (8) Westhoff, Patrick, and William H. Meyers: "The FAPRI Approach: A Few Key Principles." pp. 133-135.Agricultural Policy, International Trade, International Development, Agricultural and Food Policy, International Development, International Relations/Trade,

Agricultural policies in India

"Since the early 1990s, India has undergone substantial economic policy reform and economic growth. Though reforms in agricultural policy have lagged those in other sectors, they have nonetheless created a somewhat more open economic orientation. In this study, we evaluate the protection and support versus disprotection of agriculture in India. Our methodology involves examining market price support (MPS) for eleven crops, the expenditures on input subsidies benefiting farmers (for fertilizer, electricity and irrigation), and product-specific and total producer support estimates (PSEs) over the period 1985-2002. We draw on the extensive price-comparison and subsidy-measurement data sets and analysis developed earlier by Gulati and his co-authors, often using disaggregated analysis for representative surplus and deficit states. This allows us to explore how key cost adjustments impact the results. Overall, our results indicate that support for agriculture in India has been counter-cyclical. Support for agriculture has been rising when world prices are low (as in the mid 1980s and 1998-2002) and falling when world prices are high (as in the early and mid 1990s). Our results demonstrate the increased importance of budgetary payments for input subsidies in agriculture in recent years. Yet, in the aggregate for both price support and budgetary expenditures over the period 1985-2002 the counter-cyclical dimension of agricultural policy dominates a clear trend of movement from disprotection towards protection. Using different variants of MPS and PSE measurment we have extended earlier analysis to demonstrate the impact of key assumptions on the calculations. These assumptions we argue are important to consider. For example, in the standard approach, the MPS for the covered commodities is “scaled up” based on the share of the covered commodities in the total value of production. If the commodity coverage is less than complete, as is often the case, the scaling up procedure leads to a total MPS of greater absolute value than the MPS for the covered commodities. This can result in PSEs of different sign than the non-scaled up version but is inappropriate unless market price support for the commodities not covered is similar to that of the covered commodities. Furthermore, we find that the standard procedure of computing the MPS through a comparison of the domestic price to an adjusted reference price based on observed imports or exports can be problematic. This happens when trade volumes are relatively small. In such a scenario a reference price based on observed imports or exports can lead to misleading conclusions. To address the reference price issue, we follow Byerlee and Morris (1993). Essentially the approach adopted is to compute the level of protection or disprotection based on a counterfactual reference price chosen on economic criteria i.e. the adjusted reference price that would exist in the country if the policy interventions were removed. The relevant price can either be the autarky equilibrium price or the import or export adjusted reference price depending on the relationship among these prices. We apply this modified procedure for six crops (wheat, rice, corn, sorghum, sugar and groundnuts). The choice of the crops is dictated by the fact that India has been near self-sufficiency and there have been changes in the direction of trade over the period of analysis. The magnitudes of estimated support for agriculture obtained in this paper are important for several reasons. The estimates confirm that high levels of subsidies were required for India to export wheat or rice in recent years, a conclusion reached by several other studies. However, we report less disprotection of Indian agriculture in the 1990s than in earlier studies. Partly this difference is explained by the modified procedure for choice of a reference price. A large component of this difference can be accounted for by whether or not the scaling up procedure is invoked. There are also fertile areas for future research. Estimates of adjustment costs used in domestic-to-border price comparisons, such as transportation and processing costs or marketing margins, are crucial variables in the analysis and merit being re-examined and further updated. Resolving what are the most reasonable assumptions about reference prices, or extending the analysis to additional crops and livestock to reduce uncertainty in future assessments will also contribute to fuller understanding of the net stance of policy toward agriculture and how it has evolved over time" Authors' AbstractSouth Asia ,South Asia and Central Asia ,Agricultural policy ,Producer Support Estimates (PSEs) ,Agricultural support ,Agricultural production ,Scaling up ,

Domestic support to agriculture in the European Union and the United States

In this study, we outline the farm policy changes in the European Union, EU, and the United States, US, since 1996 and compare their levels of support under various policies. The producer support estimates for the EU are more than twice that of the US, although the value of EU agricultural production is only 30% more than the US production value. In the EU, reductions in the intervention (support) prices for cereals, oilseeds and beef sector have been compensated by increased direct payments, i.e., payments based on historical acreage and yield or animal head counts. In 1996, the US eliminated target prices and deficiency payments for major crops, and acreage set-sides for supply control. They have been replaced with fixed and emergency payments. However price floors (loan rate with deficiency payments) have been retained for major crops. The sugar and dairy sector policies of the EU and the US have undergone few changes since 1996....The initial EU and US agricultural proposals for the Doha round focused on reducing market access barriers and export subsidies, but refrained from limiting domestic support measures. Developing countries' effective opposition to these proposals led to the collapse of the 2003 WTO Ministerial Meeting at Cancun, Mexico. The recently announced Doha Work Program proposes complete elimination of export subsidies and significant reductions in market access barriers. In the case of domestic support, developing countries' views such as the reductions in product and non-product specific de minimis provisions, and the criteria for blue box payments are reflected in the proposal. At the same time, developed countries' views on the continued placement of direct payments in either blue or green box have been included in the proposal. However, agreement on the extent of reductions and the specific modalities is expected in the next 16 months. The final agreement, scheduled for presentation to members at the Hong Kong WTO Ministerial Conference in December 2005, likely depends on whether or not the new proposals and their modalities would result in meaningful limits on domestic support.Agricultural price supports ,