A State-Level Agricultural Sector Policy Model: Baseline and Implications of the Dunkel Text on Agriculture for Iowa

A better understanding of the relationship between a state\u27s agricultural sector and the national agricultural economy increases the ability of agricultural interest groups to anticipate and understand policy developments. This paper develops and documents a state-level model of the Iowa agricultural sector. The model is used to evaluate the future performance of the Iowa agricultural economy, given a specific set of assumptions about the general economy, agricultural policies, the weather, and technological change. When the model is used to analyze the implications of the Dunkel text on agriculture, the increase in Iowa net farm income is found to be proportionally higher than the increase in U.S. net farm income, because Iowa\u27s agricultural economy is concentrated in commodities that benefit from the Dunkel text

Implications of a Production Entitlement Guarantee (PEG) Program for World Commodity Markets, 1992-2000

A Production Entitlement Guarantee (PEG) program would replace existing agricultural policies with a program that would allow governments to subsidize only a fixed proportion of each farmer\u27s historical production. World supply and demand conditions would determine the price farmers receive for any production in excess of the guaranteed PEG quality because all import barriers and export subsidies would be eliminated. A dynamic multicountry, multicommodity model is used to evaluate the impact of replacing current agricultural policies in the United States, the European Community, Japan, and Canada with a PEG program. For all countries and commodities, the guaranteed PEG quantity is set equal to 80 percent of each farmer\u27s average production between 1985 and 1989. Government payments are made to farmers on their PEG production as partial compensation for revenue losses. Except for programs with environmental aims, all other programs that subsidize or protect domestic agriculture would be eliminated

A State-Level Agricultural Sector Policy Model: Baseline and Implications of the Dunkel Text on Agriculture for Iowa

A better understanding of the relationship between a state\u27s agricultural sector and the national agricultural economy increases the ability of agricultural interest groups to anticipate and understand policy developments. This paper develops and documents a state-level model of the Iowa agricultural sector. The model is used to evaluate the future performance of the Iowa agricultural economy, given a specific set of assumptions about the general economy, agricultural policies, the weather, and technology change. When the model is used to analyze the implications of the Dunkel text on agriculture, the increase in Iowa net farm income is found to be proportionally higher then the increase in U.S. net farm income, because Iowa\u27s agricultural economy is concentrated in commodities that benefit from the Dunkel text

FAPRI U.S. Agricultural Sector Elasticities, Volume I: Crops

This report presents estimates of supply, demand, and price transmission elasticities for the U.S. crops sector. The estimates are derived from the U.S. crops model maintained by the Food and Agricultural Policy Research Institute (FAPRI) and are prepared in accordance with procedures stipulated by the Organization for Economic Cooperation and Development (OECD). The first section of this report provides a general overview and describes the procedures used to perform the elasticity calculations. Each succeeding section provides general information about the elasticity estimates for a particular activity. Specific attention is given to those results that may not be intuitively clear and, in particular, to the elasticities that depend on the interaction of two or more equations in the FAPRI modeling system

FAPRI U.S. Agricultural Sector Elasticities, Volume II: Livestock, Poultry, and Dairy

This report presents estimates of supply, demand, and price transmission elasticities for the U.S. livestock, poultry, and dairy sectors. The estimates are derived from models maintained by the Food and Agricultural Policy Research Institute (FAPRI) and are prepared in accordance with procedures stipulated by the Organization for Economic Cooperation and Development (OECD)

FAPRI U.S. Crops Model Documentation

The U.S. crops model is one component of the integrated modeling system developed and maintained by the Food and Agricultural Policy Research Institute (FAPRI), which operates as a joint program at Iowa State University and the University of Missouri-Columbia. The FAPRI system is used to generate medium-term projections of the agricultural economy and to conduct policy analysis. The U.S. crops model determines domestic supply, utilization, and prices for wheat, corn, sorghum, oats, barley, soybeans, soybean meal, soybean oil, rice, and cotton, Other components of the FAPRI system include world trade models for grains and oilseeds, domestic livestock models, and satellite models that determine U.S. net farm income and the government cost of agricultural programs

Implications of a GATT Agreement for World Commodity Markets, 1991-2000

A dynamic multicountry, multicommodity model is used to evaluate the impact of a moderate General Agreement on Tariffs and Trade (GATT) agreement. The terms of this agreement are as follows. 1) Export subsidy quantities (using annual and price wedges) are reduced by 50 percent from the 1986-88 average by 1996. 2) Import restrictions are tariffed and reduced by 33 percent form the 1986-88 average by 1996 (tariffs are measured by using an annual price wedge approach). 3) Internal supports, as measured by the aggregate measure of support (AMS) are reduced by 33 percent from the 1986-88 average by 1996 (fixed reference prices are used). The results indicate that the U.S. producers would benefit substantially from the agreement because the United States has made or will have made many of the cuts required by this moderate agreement. The results also indicate that the choice of the base year is a very important variable influencing the relative benefits and losses under any likely GATT agreement

Evaluation of Policy Scenarios for the 1990 Farm Bill

Three alternatives for 1990 farm legislation are examined: (1) a continuation of current legislation; (2) small reductions in producer support levels that are phased in after a two-year delay; and (3) more significant policy reforms that include immediate support reductions for grains and cotton, marketing quotas for dairy products and sugar, and an expanded conservation reserve. Analysis indicates that the alternatives to current policies reduce both government outlays on farm programs and net farm income. The effects on the supply, demand, and prices of most crop and livestock commodities are small. Marketing quotas protect sugar and dairy producer income and allow increased imports without significant budgetary effects, but at considerable cost to consumers

Determining Winners and Losers from a GATT Agreement: The Importance of Base Periods and Rules

To identify the winners and the losers from the General Agreement on Tariffs and Trade (GATT) in agriculture, it is necessary to know which countries will be required to reduce which subsidies by what amounts. Rules that seem fair may actually impose very different future obligations on the parties to the negotiations. The base period from which reductions must be made, the manner in which export subsidies are measured, and the exchange rate used to determine tariff-reduction requirements are examples of technical issues that determine the policy implications of a GATT agreement. The paper estimates credits that countries have earned for policy changes already enacted and for changes in the world market conditions under various sets of rules. These credits vary greatly across countries and commodities and are extremely dependant on the specific rules assumed. Thus, an agreement requiring a 30 percent subsidy reduction from a particular base period may result in no required policy changes for some commodities in some countries and very large subsidy reductions for other commodities in other countries

An Analysis of the CAP Reform

The Treaty of Rome, which established the European Economic Community in 1957, defined the objectives of the Common Agricultural Policy (CAP). These objectives, contained in Article 39, follow: 1) Increase agricultural productivity by promoting technical progress and by ensuring rational development of agricultural production and optimum use of the production factors, particularly labor. 2) Ensure a fair standard of living for the agricultural community, in particular by increasing the individual earning of the persons engaged in agriculture. 3) Stabilize markets. 4) Assure the availability of supplies. 5) Ensure that supplies reach consumers at reasonable prices. The objectives of the CAP have been met, mostly through price policies that traditionally have been tied to production. The result of these policies is that production of many agricultural commodities has increased beyond levels necessary to meet CAP objectives and excess supplies have accumulated, been exported with subsidies, or both, at great expense to the European Community