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351. Adjustment Options and Strategies in the Context of Agricultural Policy Reform and Trade Liberalisation

Author:
Osamu Kubota
Publication Date:
08-2007
Content Type:
Working Paper
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Reforming agricultural policies by reducing distorting support improves economic efficiency as a whole through a better allocation of resources. This implies that adjustment may have adverse effects on some agricultural households and other people engaged in the sector, in particular in the short term. There may also be negative impacts on upstream and downstream sectors and on regional economies that rely on commodities whose prices and production levels fall with reductions in support and protection. Despite pressures to reform to meet multilateral and bilateral trade commitments and to respond to budgetary constraints, these adverse impacts are a major reason why governments find it difficult to make progress in policy reform.
Topic:
Agriculture, Reform, Trade Liberalization, and Trade
Political Geography:
Global Focus

352. The Effects of Alternative Policy Scenarios on Multifunctionality: A Case Study of Spain

Author:
Irene Blanco, Arancha Simó, and Consuelo Varela-Ortega
Publication Date:
06-2006
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
This paper focuses on the comparative analysis and evaluation of the impact of multifunctionality on the agricultural sector for different scenarios that take into account the protection of the environment and natural resources as well as the international trade agreements in the context of the EU agricultural sector. The research focuses on two different regions in Spain that represent the continental agriculture of the region of Castilla-Leon in the northern central plateau and the Mediterranean fertile agriculture of Andalusia in the south. The analysis has been carried out based on mathematical programming models that simulate farmers' behaviour and their response to the different policy scenarios that correspond to the EU agricultural policies (CAP programmes) and water policies (Water Framework Directive) currently in place. Specifically, these scenarios are: full and partial decoupling, subsidy modulation, crop prices reduction, cross-compliance measures and water pricing policies. Results indicate that the new decoupled CAP will not lead to drastic changes in land use in the two regions studied but will have negative repercussions on farmers' income. Moreover, the introduction of additional measures, such as cross-compliance, will contribute substantially to improving and protecting the environment even though they amount to an additional cost for farmers. Reduction in crop prices will have significant effects on international trade and is likely to produce a reduction in farm intensification and hence a beneficial effect on the environment but will involve negative socio-economic impacts in marginal rain-fed farms. As regards the integration of agricultural and water conservation policies, the application of the EU Water Framework Directive in conjunction with the new CAP reform would produce different regionspecific effects and might question the viability of a number of irrigated farms in Spain.
Topic:
Agriculture, Economics, and Treaties and Agreements
Political Geography:
Europe and Spain

353. Europe's Financial Perspectives in Perspective

Author:
Paul Veenendaal, Herman Stolwijk, and George Gelauff
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The budget of the European Union nearly always raises much commotion. Many member states anxiously guard their net payment positions: don't they pay too much for the EU compared to what they receive from the EU? Yet, from an economic perspective the subsidiarity principle is much more important: Should the funds be allocated by the Union or by the individual member states? From that angle, a number of fundamental reforms of European agricultural policy and structural actions (support to lagging regions) suggest themselves. These reform options may more than halve the EU budget. In addition they happen to bring the net payment positions of member states closer together.
Topic:
Agriculture, Economics, and Treaties and Agreements
Political Geography:
Europe

354. Modelling the Multifunctionality of Czech Agriculture

Author:
Ivan Foltýn and Tomáš Doucha
Publication Date:
05-2006
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The transformation of Czech agriculture since 1990 under the different stages of agricultural policy has resulted in the emergence of a strong, dual farm structure with a high share of leased land and profit-maximising (vs. family) farms. This working paper assesses the current situation concerning the multifunctional aspects of Czech farms. Applying a non-linear optimising model (FARMA 4), this study simulates the effects of different policy scenarios up to 2010 on the selected set of indicators of multifunctionality for eight farm categories (differentiated into three regions and by profit/income orientation). Under all the scenarios, there is a tendency towards a more extensive level of production with lower labour input, particularly by the profit-oriented farms that prevail in Czech agriculture.
Topic:
Agriculture, Politics, and Treaties and Agreements
Political Geography:
Europe and Czech Republic

355. Feeding the Factory Farm: Implicit Subsidies to the Broiler Chicken Industry

Author:
Elanor Starmer, Timothy A. Wise, and Aimee Witteman
Publication Date:
06-2006
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
Since the passage of the 1996 Farm Bill, the U.S. market prices of soybeans and corn have dropped 21% and 32%, respectively. These commodities are sold on the market at a price below what they cost to produce. If U.S. agricultural policies contribute to this trend, then they do so to the benefit of commodity purchasers, particularly the industrial operations that use the commodities as raw material inputs. Corporate-owned livestock operations are a case in point. This paper focuses on the broiler chicken industry, which, in the United States, is fully industrialized and vertically integrated. We compare the average costs of production for broiler feed components—corn and soybean meal—with market prices, and then use these cost-price margins to estimate the amount broiler companies save by being able to purchase feed at a price below production costs. We find that the broiler industry gained monetary benefits averaging $1.25 billion per year between 1997 and 2005 when, following the passage of the 1996 Farm Bill, market prices dropped far below production costs. In contrast, broiler industry gains from low market prices averaged a much smaller $377 million per year between 1986 and 1996. We conclude that the corporate broiler industry is a major winner from changes to U.S. agriculture policy that have allowed feed prices to fall. This finding is not significantly altered when we adjust our calculations to account for the overvaluation of agricultural land, nor does it appear to reverse under future cost/price scenarios. As policymakers turn their attention to the 2007 Farm Bill, they would do well to examine the ways in which agribusiness firms in general, and industrial livestock operations in particular, benefit from policies ostensibly designed to support family farmers. Current U.S. farm policies may be driving industrialization in the livestock production system if they give factory operations the appearance of being more cost efficient than diversified, independent operations that grow their own feed.
Topic:
Agriculture, Government, and Industrial Policy
Political Geography:
United States

356. Decoupling Agricultural Support from Production

Publication Date:
11-2006
Content Type:
Working Paper
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
A traditional objective of agricultural support policy was to increase production or maintain it at a certain level. Consequently, almost all policies were closely linked to production. Tariffs, export subsidies and other methods were used to support market prices, farmers were given direct payments for boosting production and governments subsidised items such as fertilisers.
Topic:
International Relations, Agriculture, Development, and Economics

357. China and the OECD

Publication Date:
02-2006
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
China's economic growth has averaged 9½ per cent over the past two decades. The rapid pace of economic change is likely to be sustained for some time. These gains have contributed not only to higher personal incomes, but also to a significant reduction in poverty. At the same time, the economy has become substantially integrated with the world economy. A large part of these gains have come through profound shifts in government policies. Reforms have allowed market prices and private investors to play a significant role in production and trade.
Topic:
Agriculture, Government, and International Organization
Political Geography:
China and Asia

358. Developing Countries and the WTO Agriculture Negotiations

Author:
Jennifer Clapp
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The Doha 'Development' Round of trade negotiations at the WTO has featured agricultural trade liberalization as one of its key aims. But developing countries were frustrated with both the process and the content of the agricultural agreement negotiations early on in the Round. This prompted these countries, through a number of developing country groupings such as the G-20 and others, to call for changes in the talks to ensure that developing country voices and concerns were heard. Though developing countries were in many ways successful in registering their concerns in the latter half of the negotiations and have maintained a fairly high degree of cohesion across the Global South, it remains unclear whether this cohesion will last as the uneven impacts of agricultural trade liberalization become apparent.
Topic:
Agriculture, Development, International Trade and Finance, and Third World
Political Geography:
Uruguay

359. Food Security and the Threat From Within: Rice Policy Reforms in the Philippines

Author:
Bruce Tolentino
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
The forces of globalization, in tandem with realities of domestic natural resources, economics and politics, and the influence of international institutions such as the World Trade Organization (WTO), Association of Southeast Asian Nations (ASEAN) and the Asian Development Bank (ADB), are re-shaping the food security policy and strategy of nations such as the Philippines. This paper describes the forces that have come to bear on the shaping of food security policy in the Philippines in recent years, and the Philippine Government's responses to the challenges.
Topic:
Security, Agriculture, and Health
Political Geography:
Philippines and Southeast Asia

360. Resource-Poor Farmers in South India: On the Margins or Frontiers of Globalization?

Author:
Rimjhim M. Aggarwal
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
It is often argued that an important reason why globalization may lead to GDP growth but fail to reduce poverty is because the poor are unable to participate in the new market opportunities and are marginalized. In this paper we examine the experience of resource-poor farmers in south India, who participated aggressively in the new market opportunities that opened up with trade reforms. However, these expanded market opportunities failed to improve their welfare. The paper examines why and how this happened.
Topic:
Agriculture, Globalization, and Poverty
Political Geography:
India and Asia