Comments on Suggestions for a Research Agenda in Modeling Trade Policy

International Relations/Trade,

The Evolving Farm Structure in Eastern Germany

Farm Management,

PRICE BEHAVIOR IN CORN MARKET WITH IDENTITY PRESERVED TYPES

This study examines the price behavior for identity preserved and generic corn under different demand and competition conditions. Simulation results suggest that generic corn has a greater market impact on specialty corn than the reverse, and that increased competition within processing may improve price premia received by corn growers.Demand and Price Analysis,

IMPORT RULES FOR FMD CONTAMINATED BEEF

Under the new WTO trading rules the United States is obligated to revise its beef import policy and has proposed barriers based on classifying nations according to livestock health risks. This research develops a model which captures the impact of various degrees of FMD risk from imports on setting import barriers. The results show that nations classified as high risk for FMD continue to face prohibitive barriers. As outbreak risk falls so does the level of the barrier levied against that exporter. The barrier levels are also sensitive to the expected social losses as influenced by alternative control strategies.Food Consumption/Nutrition/Food Safety, International Relations/Trade,

AN ALTERNATIVE APPROACH TO DETERMINING THE ELASTICITY OF EXCESS DEMAND FACING THE UNITED STATES

The United States embarked on a policy assuming excess demands for commodities are elastic. Some analysts question the success of that policy and argue that excess demands for farm commodities are inelastic. The controversy is deepened because the two traditional techniques for determining excess demand elasticities yield opposing estimates. We use an alternative technique based on observed variation in commodity prices, production, and use. The point estimates show excess demands for wheat, coarse grains, soybeans, rice, and cotton are elastic. However, a one-sided bootstrap test cannot reject the null hypothesis that the excess demands for wheat, coarse grains, and soybeans are inelastic.Demand and Price Analysis,

The Transformation of Hungarian Production Cooperatives and Future Consequences

This research examines the transformation of Hungarian agricultural production cooperatives. In contrast to early expectations, cooperatives did not experience much membership loss. Rather, the enterprises held together, although they downsized. The distribution of collective assets occurred quickly and created much tension. The sector experienced a severe decapitalization, and the efficiency of the sector fell. There was a sharp rise in unemployment. Sales and marketing were disrupted. Thus, the cooperatives transformed in a very hostile situation. They survived, and some prospered, yet, in general, they remain vulnerable to adverse economic developments. Healthy cooperatives will be vital to the success of smaller private farms.Agribusiness,

Shifts in Eastern German Production Structure Under Market Forces

The paper is organized into three major sections. The first section considers agricultural production prior to German reunification in 1990. It looks at the agricultural production structure in the region prior to the division of Germany in 1945 as well as the patterns which arose under the communist government. The second section starts with the 1989 situation and then discusses the initial adjustments seen as market forces are introduced -- 1990 and 1991. The third section builds upon this base to speculate on how the production structure will unfold in the future.International Relations/Trade,

BARGAINING FOR EUROPEAN UNION FARM POLICY REFORM THROUGH U.S. PESTICIDE RESTRICTIONS

Future trade negotiations will incorporate environmental concerns. This study presents a framework to evaluate whether the United States would be willing to adopt a pesticide restriction in exchange for European Union liberalization of producer support. It outlines the conditions that must be met if a bargain is to occur. Partial equilibrium commodity models test whether the conditions for a bargaining solution are satisfied. The research results indicate that a potential bargain is possible for stricter U.S. environmental regulations in coarse grains if there is a sufficiently large positive EU externality. Conditions in the oilseed market preclude a bargain.Agricultural and Food Policy,

TRADE POLICY UNDER IMPERFECT COMPETITION: AN ASSESSMENT OF THE TRQ ON LAMB MEAT

The United States imposed a tariff-rate quota (TRQ) on lamb meat in July 1999. Early analysis suggested the possibility that lamb growers could lose welfare via the creation of packer market power. This paper considers how subsequent events modify that analysis. Observed prices suggest reduced pass-through. Lamb prices are unchanged and more stable. Using an annual quota instead of a quarterly quota reduces the opportunity for market conduct switching. Early termination of the TRQ to comply with the WTO rulings magnifies any welfare loss. Assistance payments prevent welfare losses to growers with little impact on the market.International Relations/Trade, Livestock Production/Industries,

Economic Modeling of Livestock Disease Outbreaks

The paper surveys articles examining the economic impacts of a livestock disease outbreak and focuses on modeling issues. One set of papers considers setting an import barrier when there is a livestock disease risk. They show that the level of a risk-based import barrier is sensitive to the impact of disease on economic welfare. The remaining articles focus on estimates of the economic impacts. An outbreak is modeled in a U.S. agricultural sector model and shows the importance of lost exports and consumer response to the magnitude of losses. The final paper argues for de-composition of the welfare impacts. Lessons for future research include improved links to epidemiological research, improved inclusion of trade, extension to non-agricultural sectors, and knowledge of consumer response.Foot-and-mouth disease, Modeling, Trade, Livestock Production/Industries,