General and partial equilibrium analysis of the impact of the Central America Free Trade Agreement on the U.S. rice sector

The market conditions proposed by CAFTA are likely to positively impact the U.S. rice sector. Despite the differences in the impact of the agreement, both analytical approaches, namely, partial and general equilibrium modeling, yield results in the same direction. The small difference in the results from both approaches suggests low income and cross-sectoral effects between the U.S. rice sector and other segments of the economy. U.S. rice production is likely to expand to meet an increasing international demand for this commodity. The U.S. rice milling industry should also expect benefits from CAFTA, expanding by 1 percent in the general equilibrium model and up to 8 percent in the partial equilibrium framework.International Relations/Trade,

Sensitive Product Designation in the Doha Round: The Case of Rice

Effects of sensitive product designation in WTO trade reform on the international rice market are analyzed. General and partial equilibrium frameworks are used. Results suggest large impacts. Among exporters, China and the U.S., major suppliers of the Japanese and South Korean markets, are most negatively affected.Crop Production/Industries,

Rice Trade Policies and Their Implications for Food Security

There is a strong linkage between the behavior of the rice market and the state of food security in many regions around the world, particularly in Asia, as made evident in the 2007-08 commodity crisis. Rice is a staple for the majority of the population in Asia, where roughly 60% of the close to one billion undernourished people live (FAO, 2010). As Timmer (2010) states, “it is impossible to improve food security in the short run or long run without providing adequate supplies of rice that are accessible to the poor” (p. 2). The rice crisis of 2007-08 showed the crucial role of export and import policies on the behavior of the rice market and its consequences for price stability and food security. Market fundamentals could only explain a minimal part of the skyrocketing increase in rice prices observed (Dawe, 2010). The overarching objective of this study is to assess the impact of international rice trade policies on the patterns of production, consumption, trade, and prices, from an ex-post and ex-ante perspective, and analyze the implications of these policies from a food-security point of view. The RICEFLOW model (Durand-Morat and Wailes, 2010) is used for the assessment. RICEFLOW is a spatial partial equilibrium model of the global rice economy in which the behavior of producers and consumers are specified according to neoclassical economic theory (profit and utility maximizers, respectively). Domestic production and imports are specified as imperfect substitutes following Armington (1969). The model is calibrated to calendar year 2008, the latest available year for which the RICEFLOW database is available. The 2008 RICEFLOW database is disaggregated into 65 country/regions, including the largest producers and traders of rice, and 9 rice commodities defined on two dimensions, (1) milling degrees (paddy, brown, and milled), and (2) type (long grain, medium & short grain, and fragrant). Given the crucial importance of the Armington elasticities and the lack of good estimates on these parameters, systematic sensitivity analysis is conducted on the best available estimates to generate stochastic distributions of the endogenous variables with respect to these behavioral parameters. Results are decomposed in two dimensions, namely, (1) trade policy groups, and (2) countries, to obtain a better idea of the partial effect of policies and or countries applying them. Achieving food security implies guaranteeing access (physical availability and affordability) to safe and nutritious food to the entire population. Improving food security is the key goal of the World Food Summit of 1996 and the first Millennium Development Goal. Food security assessments have traditionally been done either at the macro level (market stability) or micro level (household access). Although the methodology used in this study constrains us to focus on the macro level, it can contribute to an improved understanding of trade policy for regional and global rice supply and, thus, for improved market stability.rice, trade, policies, food security, Agricultural and Food Policy, Food Security and Poverty, International Relations/Trade, F13, Q17, Q18,

Coping with DR-CAFTA: Assessing the Impact of the Agreement and Designing Adjustment Programs for Sensitive Agriculture in Honduras

Honduras has for almost two decades embraced economic integration as a way to achieve sustained economic growth. The DR-CAFTA agreement signed in 2004 represents another step towards economic openness. The agreement generated a heated debate about the benefits and costs to the Honduran economy. Previous assessments suggest that Honduras will have a marginal aggregate benefit from DR-CAFTA. The findings from this study suggest that the agreement might actually yield a marginal loss vis-à-vis the counterfactual. Previous studies also stress the potential for large losses resulting from the agreement, particularly for some traditional and sensitive agricultural sectors. The findings from this study suggest that, in aggregate, the welfare of basic grain households will decrease only marginally as a result of DR-CAFTA. This study contributes to the existing literature by providing a new assessment of the agreement on the Honduran economy, employing a new Social accounting matrix and a dynamic computable general equilibrium model particularly developed for this study. Furthermore, this study expands the previous literature, assessing the feasibility of alternative interventions, and developing a policy proposal that could serve as a road map for future public intervention aimed at easing the transition to more competitive domestic agricultural markets. The proposed intervention consists of three components, namely, (1) a technical assistance program, (2) a short-term agricultural financing program, and (3) a medium-term agricultural financing program

Sensitive Product Treatment in Agricultural Trade Negotiations

The fact that trade, and especially agricultural trade, remains far from free is puzzling, since the superiority of free trade receives overwhelming support among economists (Gawande and Krishna, 2003; Rodrik, 1994). International trade scholars have devoted significant resources to forecasting the impact of trade policy reforms (for a survey of these studies see Congressional Budget Office, 2005), and their findings are relevant inputs for officials negotiating a trade agreement as well as for politicians in charge of ratifying it. The perceived gains and losses attached to different outcomes have been identified as a significant factor shifting the outcome of a trade agreement negotiation (McMillan, 1990). Less well-known are the factors that would impact the result of a negotiation round involving agriculture. While political scientists have devoted significant resources and developed numerous theories to explain the pattern of bargaining outcomes, the number of empirical assessments remains limited. Among the factors to blame for the low number of empirical evaluations is the scarcity of information regarding negotiation strategies and outcomes (Odell, 2002). The lack of research in this area is puzzling, since countries negotiating regionally and multilaterally have many times struggled to satisfactorily conclude negotiations due to a lack of consensus on agriculture. The potential gains that a reduction in agricultural protection worldwide could generate, and the limited knowledge on the ways negotiation outcomes can be affected, are the main motivations for this study. As stated by Hoekman and Anderson (1999) in reference to reaching an agreement on agriculture in the current WTO Doha Round of negotiations, “The potential gains from liberalization are large”, but “Getting there is another matter” (p. 175). This study focuses on U.S. trade negotiations with Western Hemisphere countries, with particular attention to sensitive agricultural products, about which the most heated bargaining occurs. Arguably as a consequence of the lack of progress at the multilateral arena, the U.S. has embarked on bilateral trade negotiations with several countries, but with a particular emphasis with Western Hemisphere partners. Thus, over the last 10 years it has ratified trade agreements with Chile, Peru, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua (the last six as part of the DR-CAFTA Agreement), and signed but not yet ratified agreements with Colombia and Panama. Following Trefler (1993), a simultaneous equation model is developed to estimate the correlation between the change in market access (ΔMA) as a result of free trade negotiations, and a number of political economy (PA) and negotiation context (NC) variables suggested by the endogenous tariff theory to be associated with the level of protection granted to a sector. The change in market access in the context of this study is represented by changes in import tariffs and tariff-rate-quotas negotiated as part of the preferential trade agreements (PTAs). While we acknowledge the increasing importance of non-tariff barriers (other than TRQs) as a way to afford protection from imports, PTAs usually do not include specific outcomes on NTBs, and therefore gauging the change in NTBs resulting from a PTA is not possible. Negotiation process variables (NP) primarily bargaining strategies, are seen by many scholars as important intervening variables to explain the pattern of market access achieved in bargaining. By focusing on sensitive agricultural products, this study controls for (NP) variables, since negotiations on sensitive agricultural products between the U.S. and its developing Western Hemisphere partners are assumed to have entailed the use of strong bargaining strategies on both sides. Political economy variables subject to be used are economic size, concentration ratios, import penetration ratios and their change, capital/labor ratios, and sectoral to total labor ratios, all argued to be positively related to the level of protection granted to a sector. Among feasible negotiation context variables are relative power of nations, foreign direct investment in the partner’s economy, unemployment rate, and tax structure (dependence on import policies as a source of revenues). The level of imports (IMP) is modeled to be a function of comparative advantage variables (CA) and the change in market access ΔMA. ΔMA = f(PA, NC NP) IMP = f(CA, ΔMA) The findings from the quantitative assessment are to be complemented with findings from selected case studies, thus expanding our understanding of the factors affecting the outcome of the bargaining activity over sensitive agricultural products in the context of preferential trade agreements.trade negotiations, agricultural trade, free trade agreements, political economy, Agricultural and Food Policy, International Relations/Trade, Political Economy, F59, Q17,

HYBRID RICE AND ITS IMPACT ON FOOD SECURITY AND THE PATTERN OF GLOBAL PRODUCTION AND TRADE

The hybrid rice technology is one of the many ways in which productivity of scarce resources devoted to rice production could be enhanced, with the consequent alleviation of food insecurity. The findings of this study show that the hybrid rice technology has so far made some sizable contributions to per-capita availability of rice in adopting countries with marginal spillover effects to other regions. However, at forecasted population growths, a massive intensification of adoption would be needed to maintain per-capita availability of rice at baseline levels. But even with adoption rates climbing significantly, much higher equilibrium prices are expected, which will represent a challenge for the hungry in many parts of the world. While hybrid rice has the potential to contribute significantly to improve production and food security, more efforts are needed to improve the productivity of the constraining production resources.hybrid rice, food security, technology change, Demand and Price Analysis, Food Security and Poverty, International Relations/Trade, Research and Development/Tech Change/Emerging Technologies, Q16, Q55,

Identifying Arkansas Food Desert Blocks Suitable for a Peer-to-Peer Modeled Food Redistribution Program

Abstract Nearly 10% of Americans reside in low-income urban food deserts which are low-income areas that lack access to affordable and nutritious foods. Food deserts in Arkansas contribute to a food insecurity rate above the national average, making it one of the most food insecure states in the country. Increased internet usage and consumer interest in sharing based companies contribute to the idea of a sharing, or peer-to-peer (P2P) style food redistribution program. The objective of this study is to identify which of the 186,211census blocks in the state of Arkansas are food deserts and best suited for and in the most need, based on an identified set of criteria, of a P2P food redistribution program. A multi-criteria decision analysis was conducted using population, internet access, vulnerable communities, and vehicle availability as criteria. Results suggest that based upon the close proximity of priority areas, transportation access, ethnic/racial diversity, and the number of possible collection locations, Pulaski County be targeted for a P2P food redistribution pilot program

Factors affecting the technical efficiency of dairy farms in Kosovo

A possible accession into the World Trade Organization (WTO) and an expected membership in the European Union raise significant opportunities and challenges for the agricultural sector in Kosovo. As a result of these changes, the sector will have to improve efficiency and competitiveness. This research is motivated by the need to understand better the forces that drive competitiveness in the Kosovo dairy sector. This study estimates the technical efficiency (TE) of 243 dairy farms in Kosovo and relates TE variation to farm size and other primary determinants of TE. A stochastic frontier production function is estimated using a two-stage procedure. Results reveal that concentrate feed intake, land use per cow, and the number of days cows had been kept on pasture have statistically significant impacts on milk productivity per cow. The mean technical efficiency of dairy farms was estimated at 0.72. The major determinants that increase efficiency are breed improvement, intensification of corn production on the farm, improving concentrate feed intake, and using free-range production systems. Given the results from the technical efficiency analysis, it is crucial for the Government of Kosovo to redesign their dairy policy—specifically their grant investment schemes—and target assistance on improving national herd genetics, promoting free range systems and expanding area planted in corn

Do coupled subsidies increase milk productivity, land use, herd size and income? Evidence from Kosovo

This study assesses the effectiveness of the Subsidy per Head Scheme (SPHS) in increasing milk productivity, land use, herd size and income in dairy farms across the seven regions of Kosovo. SPHS represents one of the largest coupled subsidy programs in the agricultural sector of Kosovo in terms of farmer participation and budget allocation. We use a Propensity Score Matching approach to assess the impact of this program by comparing a group of participants with a group of non-participants during the 2013–2014 farming seasons. We test the robustness of the impact results using four different matching algorithms. Results reveal SPHS was not effective in increasing land use, gross income and farm size (number of cows), although SPHS had a limited impact on improving milk productivity. In addition, the study highlights the need to reformulate coupled subsidies and develop new, complementary strategies that address farmers’ needs more efficiently

Economic Benefits of Controlling Red Rice: A Case Study of the United States

Red rice (O. sativa) is one the most prevalent and damaging weed problems in direct seeding rice systems worldwide and can cause significant losses in rice productivity and quality. Red rice has been a problem in the United States for decades, and it is a growing problem in Asia, where 90 percent of the global rice production occurs. Unlike for other crops, where genetically engineered (GE) herbicide tolerant varieties are available, to date, Clearfield (CL) and Provisia rice are the only technologies available to selectively control red rice using chemical herbicides in commercial rice fields. We develop a counterfactual scenario without CL rice and ascertain the yield and quality losses due to red rice infestation in the Mid-South of the United States. Our findings suggest that even with the higher costs of CL rice, relative to non-CL rice, that the returns are $0.15,$0.36, and $0.54 more for every dollar invested than non-CL rice with a light, moderate, and heavy initial red rice infestation rate, respectively. These results imply that the higher upfront costs for CL rice are offset by more than proportional higher profits relative to their non-CL rice counterparts