Trans-Pacific Partnership: Benefits to U.S. Agriculture

A document pertaining to the Trans-Pacific Partnership between the United States and several other countries. This agreement opens markets and will support expansion of U.S. food and agricultural exports, increase farm income, generate more rural economic activity, and promote job growth. Details particular exports and imports

Market power in tobacco: Measuring multiple markets

Traditional market power analyses of the U.S. cigarette manufacturing industry consider monopoly power exertion by manufacturers in selling cigarettes to consumers. Market characteristics combined with government policy make it plausible that manufacturers exert monopsony market power in procuring tobacco. We investigate this possibility in the U.S. and international tobacco markets by extending nonparametric tests to include simultaneously potential monopoly market power with potential monopsony market power in multiple input markets, allowing both Hicks-neutral and biased technical change. We use annual data from the cigarette manufacturing industry from 1977 to 1993. Results indicate substantial departures from competitive pricing in the procurement of domestic tobacco, supporting the postulate that cigarette manufacturers appropriate monopsony rents despite, and perhaps at times through, U.S. tobacco farm policy. Results are less clear with respect to monopsony market power exertion in imported leaf tobacco procurement by cigarette manufacturers. Finally, results indicate that monopoly market power exertion is relatively small and that, when the possibility of monopsony market power exertion is admitted, monopoly market power exertion is no longer problematic.[EconLit citations: L100, L660]. © 2007 Wiley Periodicals, Inc. Agribusiness 23: 35-55, 2007.

Minimum effective scale in export promotion

Nonprice promotion has long been used by small firms or organizations to increase agricultural exports. Some believe that export promotion in these cases is often unsuccessful as the promoter is unable to achieve the “critical mass” of awareness that is required for success. The objective of this article is to develop a theoretical explanation for the likely existence of minimum expenditure thresholds and to estimate their size using an econometric model of the optimal supply of advertising. An empirical example of apple promotion from Washington state (USA) finds minimum effective scale levels for four key promotion activities among several Latin American countries.[EconLit citations: C34, M37, Q17]. © 2002 Wiley Periodicals, Inc.