DISCUSSION: WORLD AGRICULTURAL MARKETS: IMPLICATIONS FOR U.S. FOOD AND AGRICULTURAL POLICY

Agricultural and Food Policy, International Relations/Trade,

BOOK REVIEW: RITSON, C., AND D.R. HARVEY, EDS. THE COMMON AGRICULTURAL POLICY, 2ND EDITION. WALLINGFORD, UK: CAB INTERNATIONAL, 1997.

Teaching/Communication/Extension/Profession,

Arkansas producers’ attitudes toward the 2002 Farm Bill and preferences for the 2007 Farm Bill

The Federal Security and Rural Investment Act of 2002, otherwise known at the 2002 Farm Bill, contains current legislation regarding federal public policies and programs for U.S. food and agriculture. This legislation will expire in 2007 and thus new legislation will be developed. It is important to have farm producers’ input for developing this legislation because the policies and programs influence their business practices and livelihoods. The purpose of this study was to determine Arkansas producers’ attitudes toward current and future farm legislation based on an analysis of a survey administered to Arkansas farm producers in summer 2006. The main finding of this research is that Arkansas producers would like to create more incentives for biofuel research. They also indicate through survey preferences that risk management policies such as insurance, disaster assistance, and labeling of foods should be addressed more thoroughly with more funding allocated to these areas. Arkansas producers are not in favor of eliminating current commodity payments although there was a significant difference of opinion in this area between those who produce program crops and those who do not. These study results provide an important assessment of producer preferences for future farm legislation

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,

ANALYSIS OF U.S. RICE POLICY IN A GLOBAL STOCHASTIC FRAMEWORK

Replaced with revised version of paper 04/13/11.Government payments, stochastic analysis, deterministic analysis, rice trade, empirical distribution, Arkansas Global Rice Model, Agricultural and Food Policy, Demand and Price Analysis, International Relations/Trade, Q11, Q17,

The supply response of U.S. rice: how decoupled are income payments?

This study examines the decoupled nature of direct payments and counter-cyclical payments to determine if they have an impact on U.S. rice area harvested. A naïve expectations model was specified, with the results indicating that direct payments are decoupled; however, counter-cyclical are not. Overall, the results indicate that a change in the expected gross margin or counter-cyclical payments would stimulate a supply response in rice production. The lack of a significant amount of time-series data renders results of this analysis as preliminary.Agricultural and Food Policy,

Analysis of Commodity Program Adjustments for U.S. Rice in Stochastic Framework

Potential adjustments in U.S. commodity program for rice are evaluated in this paper using stochastic analysis in a global modeling framework. Corresponding threshold and loss-compensatory increases in target price and loan rates are determined with assumed outright and gradual elimination of direct payments. Results show that if direct payments (DP) are eliminated in 2012, a 23% increase in both the target price (TP) and loan rate (LR) triggers counter-cyclical payments (CCP) 80% of the time; and it will take an increase of 48% in TP and LR to generate CCP enough to compensate for the loss in total DP. If DP is gradually removed over 5 years, the trigger and compensatory increases in TP and LR are 41% and 46%, respectively. Furthermore, if DP is eliminated outright and TP maintained, an increase of 71% in LR triggers loan deficiency payments (LDP) 75% of the time; and it will take an increase of 130% in LR to generate enough LDP to recoup the total loss in DP. Under gradual removal of DP, the trigger and compensatory increases in LR are 71% and 92%, respectively.U.S. commodity program, threshold and loss-compensatory increases, stochastic analysis, Agricultural and Food Policy, Crop Production/Industries, Q18,

2011 Updated Arkansas Global Rice Model

The Arkansas Global Rice Model is based on a multi-country statistical simulation and econometric framework. The model is disaggregated by five world regions: Africa, the Americas, Asia, Europe, and Oceania. Each region includes country models which have a supply sector, a demand sector, a trade, stocks and price linkage equations. All equations used in this model are estimated using econometric procedures or identities. Estimates are based upon a set of explanatory variables including exogenous macroeconomic factors such as income, population, inflation rate, technology development, and especially, government determined policy variables which reflect the various mechanisms by which countries intervene in their rice sector economy. Individual country models are linked through net trade to recognize the interdependence of countries in the world rice economy.Rice, trade model, policy, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies, CO2, C61, F11, F14, Q17, Q18,

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,

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,