Agricultural Policy
Domestic Topics
International Topics
Agricultural Policy
New Market Realities Affect Crop Program Choices (November 2008) discusses the implications of higher crop prices for commodity program payments. Higher prices reduce the likelihood of commodity program payments based on fixed target prices, but increase the importance of insurance under the Federal crop insurance program. The new Average Crop Revenue Election (ACRE) program offers revenue protection based on recent market prices, but participating farmers must forgo some benefits of traditional commodity programs.
2008 Farm Bill Side-By-Side (August 2008) presents a title-by-title summary of key provisions of the 2008 Act in a side-by-side comparison with previous legislation. The side-by-side includes links to related ERS publications and to analyses of previous farm acts. New features include a user's guide, an A-Z list of major provisions, and a search function.
Effects of Marketing Loans on U.S. Dry Peas and Lentils: Supply Response and World Trade (May 2008) describes how extending marketing loans for the 2002-07 crops of dry peas and lentils led to expanded acreage in some years. However, simulation results suggest that impacts on U.S. pea and lentil exports were minor.
Commodity Backgrounders addresses considerations
in domestic agricultural policy deliberations, including
market conditions, policy proposals, trade agreements,
and the interactions between policy and markets for selected
commodities.
Integrating Conservation and Commodity Program Payments: A Look at the Tradeoffs (November 2007) examines hypothetical scenarios and finds that policymakers would face significant tradeoffs in designing a single program to achieve both goals. Cost-effective environmental gains are achieved largely by supporting producers who can deliver large environmental gains per dollar. These producers, however, are not necessarily those historically receiving commodity program payments. For the full report, see Integrating Commodity and Conservation Programs: Design Options and Outcomes (October 2007).
Relaxing
Fruit and Vegetable Planting Restrictions (May
2007) finds that market effects would likely be limited
and confined to specific regions and commodities. Eliminating
these planting restrictions for commodity program participants
might enable some producers to switch from program
crops to fruit and vegetables in such areas as California,
the upper Midwest and the coastal plain in the Southeastern
States. For the full report, see Eliminating
Fruit and Vegetable Planting Restrictions: How Would
Markets be Affected? (November 2006).
Whole-Farm Approaches
to a Safety Net (June 2006) looks at the risk management
potential of "whole-farm revenue" programs.
A whole-farm program is based on revenues from all farming
activities added together and is not linked to the production
of particular commodities.
EU
and U.S. Organic Markets Face Strong Demand Under Different
Policies (February 2006) examines the policies adopted
by the European Union (EU) and United States. Many EU
countries have "green payments" available for
transitioning and continuing organic farmers. By contrast,
the U.S. Government has largely taken a free-market approach
to the organic sector. For the full report, see Market-Led
Growth vs. Government-Facilitated Growth: Development
of the U.S. and EU Organic Agricultural Sectors (August
2005).
Economic Analysis of Base
Acre and Payment Yield Designations Under the 2002 U.S.
Farm Act (September 2005) evaluates farmers' decisions
to designate base acres under the 2002 Farm Act. Findings
suggest that decisionmakers responded to economic incentives
in their designations of base acres by selecting those
options that resulted in the greatest expected flow of
program payments. See also Farm
Program Acres for the county-level farm program and
planted acreage data used in the report, which can be
downloaded and mapped.
Did the
Mandatory Requirement Aid the Market? Impact of the Livestock
Mandatory Reporting Act (September 2005) compares
the mandatory price reporting system developed by USDA's
Agricultural Marketing Service in 2001 with the previous
voluntary reporting system. The trend toward formula purchases
has slowed since mandatory price reporting was implemented,
and market forces have likely contributed to an increase
in the volume of cattle moving under negotiated purchases.
The 20th Century Transformation
of U.S. Agriculture and Farm Policy (June 2005) analyzes
a wide range of historical data related to farm structure
over the past century and provides perspective on the
long-term forces that have helped shape agricultural and
rural life. A review of some key policy developments also
considers the extent to which farm policy design has or
has not kept pace with the continuing transformation of
American agriculture. See also Milestones
in U.S. Farming and Farm Policy (June 2005), an Amber
Waves data feature based on this report.
Decoupled Payments in
a Changing Policy Setting (October 2004) analyzes
the U.S. experience with decoupled payments in the Production
Flexibility Contracts program from 1996 to 2002. The studies
in this report explore aspects of household behavior,
as well as analyses of agricultural market conditions
that may influence how farmers choose to use decoupled
payments.
The 2002 Farm Act: Provisions
and Implications for Commodity Markets (November 2002)
provides an initial assessment of the legislation's effects
on agricultural production, commodity markets, and net
farm income over the next 10 years. Results indicate that
commodity market impacts are fairly small. Net farm income
is projected higher than under a continuation of the 1996
Farm Act, largely reflecting an increase in government
payments.
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Domestic Topics
Fluctuating Food Commodity Prices: A Complex Issue With No Easy Answers (November 2008) explores the many factors that contributed to the rapid escalation of food commodity prices through mid-2008. For the full report, see Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices (July 2008).
Production Expenses of Specialized Vegetable and Melon Farms (September 2008) analyzes the major expense components of specialized U.S. and regional vegetable and melon farms during 1998-2006 using data from USDA's Agricultural Resource Management Survey. Labor was found to account for 30 percent of U.S. cash expenses, followed by fertilizer and agricultural chemicals at 18 percent.
The Economic Organization of U.S. Broiler Production (June 2008) describes, based on a large and representative survey of broiler operations, the industry's organization, housing features, contract design, fees and enterprise cost structures, and farm and household finances. Broiler production in the United States is coordinated almost entirely through systems of production contracts, and the industry is undergoing a gradual structural change as production shifts to larger broiler enterprises.
Hired Farmworkers a Major Input For Some U.S. Farm Sectors (April 2008) reports that because more than half of hired farmworkers lacking legal authorization to work in the United States, legislative reforms of immigration policies could affect the agricultural sector. As the total U.S. agricultural labor force has declined over the past century, hired farmworkers have become a larger proportion of all farmworkers and are especially important in the production of fruit, tree nuts, vegetables, and horticultural crops. For the full report, see Profile of Hired Farmworkers, A 2008 Update (July 2008).
USDA Agricultural Projections
to 2017 (February 2008) contains longrun projections
covering supply, demand, prices, and other economic
variables for major U.S. crop and livestock sectors.
The Changing Economics of U.S. Hog Production (December 2007) documents the increasing size and specialization of U.S. hog operations during the last 15 years. Large operations that specialize in a single production phase and produce under contract have replaced traditional farrow-to-finish operations. These structural changes have coincided with substantial gains in efficiency and lower production costs, most of which are attributed to increases in scale of production and technological innovation. For an Amber Waves article on this topic, see Technology, Larger Farm Size Increased Productivity on U.S. Hog Farms (April 2008).
Structure
and Finances of U.S. Farms: Family Farm Report, 2007 Edition (June 2007) presents comprehensive information on family
and nonfamily farms and important trends in farming,
operator household income, farm performance, and contracting.
Most farms are family farms, and small family farms
account for most farms but produce a modest share of
farm output. Many farm households have a large net worth, reflecting the land-intensive nature of farming. A companion
brochure summarizes the report's findings.
Ethanol Expansion in the United States: How Will the Agricultural Sector Adjust? (May 2007) examines effects of the expansion in U.S. ethanol production. Market impacts extend well beyond corn, the primary feedstock for ethanol in the United States, to supply and demand for other crops, such as soybeans and cotton, as well as to U.S. livestock industries. As a consequence of these commodity market impacts, farm income, government payments, and food prices also change. See narrated slideshow for an overview; see related Amber Waves feature U.S. Ethanol Expansion Driving Changes Throughout the Agricultural Sector (September 2007).
Managing Risk With Revenue Insurance (May 2007) discusses crop revenue insurance as a method farmers use to manage revenue variability that results from yield and price risks. Commodity-level revenue insurance, particularly for corn, soybeans, and wheat, has become a major part of the subsidized Federal crop insurance program. Whole-farm revenue insurance, based on combined revenue from all commodities produced on a farm, is a more broad-based approach, but is difficult to administer.
The Changing Face of
the U.S. Grain System (February 2007) discusses
the evolving nature of U.S. grain handling and marketing,
which is increasingly marked by product differentiation
and market segmentation. More specialty crops now require
either some form of segregation or full-scale identity
preservation to keep them separate from conventional
commodities. Market segmentation within the grain system
is driven by the need to preserve market value or ensure
product purity.
Agricultural
Contracting: Trading Autonomy for Risk Reduction (February
2006) reports that the share of production under contract
grew from 11 percent in 1969 to 39 percent in 2003. For
farm operators, contracts provide benefits from reduced
risks, but also result in loss of managerial control and
reduced autonomy. For the full report, see Agricultural
Contracting Update: Contracts in 2003 (January 2006).
Crop Genetic Resources:
An Economic Appraisal (June 2005) examines the role
of genetic resources, genetic diversity, and efforts to
value genetic resources. While crop genetic resources
are the basis of agricultural production, they are largely
public goods. Thus, private incentives for genetic resource
conservation may fall short of achieving public objectives.
Food
Traceability: One Ingredient in a Safe and Efficient Food
Supply (April 2004) describes the results of an investigation
into the amount, type, and adequacy of traceability systems
in the United States, focusing on the fresh produce, cattle/beef,
and grain sectors. The investigation finds that these
systems vary across industries as firms balance the private
costs and benefits to determine the efficient level of
traceability. For the full report, see Traceability
in the U.S. Food Supply: Economic Theory and Industry
Studies (March 2004).
Income, Wealth, and the
Economic Well-Being of Farm Households (July 2002)
shows that neither changes in income for the farm sector
nor for any particular group of farm business can be presumed
to reflect changes confronting farm households. Farm households
draw income from various sources, including off-farm work,
other businesses operated and, increasingly, nonfarm investments.
Using an expanded definition of economic well-being, the
report indicates that farm households as a whole are better
off than the average U.S. household, but that 6 percent
remain economically disadvantaged.
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International Topics
Fluctuating Food Commodity Prices: A Complex Issue With No Easy Answers (November 2008) explores the many factors that contributed to the rapid escalation of food commodity prices through mid-2008. For the full report, see Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices (July 2008).
Food Safety and Imports: An Analysis of FDA Import Refusal Reports (September 2008) examines U.S. Food and Drug Administration (FDA) data on refusals of food offered for importation into the United States from 1998 to 2004. Although the data do not necessarily reflect the distribution of risk in foods, the study found that import refusals highlight food safety problems that appear to recur in trade and where the FDA has focused its import alerts, examinations, and other monitoring efforts.
Food Security Assessment, 2007 (July 2008) projects that the food security situation in 70 developing countries will deteriorate over the next decade. The estimates also indicate that the number of food-insecure people for these countries rose between 2006 and 2007, from 849 million to 982 million. Food and fuel price hikes, coupled with a slowdown in global economic growth, hinder long-term food security progress.
The Environment for Agricultural and Agribusiness Investment in India (July 2008) reports that, despite strong overall economic growth and strengthening food demand, investment in Indian agriculture and agribusiness has remained sluggish, and growth in farm output has slowed, since the early 1990s. The policy environment has grown more investor friendly since the late 1990s and private investment appears to be responding, but significant barriers remain and the pace of future reforms remains uncertain.
The Japanese Market for Oranges (March 2008) reviews the trade, production, and consumption of oranges in Japan, which is one of the largest markets for U.S. orange exports. Consumption and trade peaked in the mid-1990s. The report uses recent research findings about demographic and economic changes that might explain why consumption has fallen off in the past 15 years.
Converging Patterns in Global Food Consumption and Food Delivery Systems (February 2008) reports that across countries and income levels worldwide, consumers are choosing to spend their additional income on some combination of increased quality, convenience, and variety of foods. Food delivery systems and consumption patterns in middle-income countries like China and Thailand are converging, or "catching up" to countries with higher income levels. Income growth has been a primary force behind converging global consumption patterns, but globalization of the food industry is also contributing. For the full report, see Convergence in Global Food Demand and Delivery (March 2008).
The Future of Biofuels: A Global Perspective (November 2007). Global biofuel production tripled between 2000 and 2007, but still accounts for less than 3 percent of the transportation fuel supply worldwide. Biofuels will likely be part of a portfolio of solutions to high energy prices, including conservation, more efficient energy use, and use of other alternative fuels.
U.S. Trade Growth: A New Beginning or a Repeat of the Past? (September 2007) evaluates how global economic growth patterns and domestic macroeconomic conditions have influenced recent trends in U.S. agricultural trade. Emerging market growth, a weaker dollar, and the potential for slower domestic consumption growth suggest a continuation of robust export growth and moderating demand for imports. For the full report, see Global Growth, Macroeconomic Change, and U.S. Agricultural Trade (September 2007).
China Currency Appreciation Could Boost U.S. Agricultural Exports (August 2007) reports that China's undervalued exchange rate keeps prices of most U.S. food and agricultural products too high to be competitive in China. Appreciation of the Chinese currency will increase the purchasing power of Chinese consumers on world markets and increase China's demand for imported commodities.
Food Security Assessment, 2006 (June 2007) projects that the number of hungry people in 70 lower income countries rose between 2005 and 2006, from 804 million to 849 million. However, the food distribution gap—an indicator of food access—declined, which means that, although more people are vulnerable to food insecurity, the intensity was less in 2006 than in 2005. By 2016, the number of hungry people is projected to decline in all regions, except Sub-Saharan Africa.
Indian Wheat and Rice Sector Policies and the Implications of Reform (May 2007) suggests that future developments in India’s food grain sector will be shaped by how policies adapt to the sector’s new economic environment. Some changes, such as reducing price supports and the scope of government food grain operations, would likely cut government costs, benefit consumers, allow a larger private sector role in the domestic market, and increase reliance on trade.
NAFTA at 13: Implementation
Nears Completion (March 2007) evaluates the impact
of the North American Free Trade Agreement (NAFTA)
as implementation of the accord draws to a close. Just
a handful of the agricultural trade restrictions scheduled
to be phased out under NAFTA remain, and these are
scheduled for elimination in 2008. Once NAFTA is fully
implemented, the member countries—Canada, Mexico,
and the United States—will need to exercise their
national autonomy, either individually or in concert,
to achieve further integration of their agricultural
markets.
Demand for Food Quantity
and Quality in China (January 2007) reports that,
as incomes rise, Chinese consumers are changing their
diets and demanding greater quality, convenience, and
safety in food. The demand for quality by high-income
households has fueled recent growth in China’s food retail
sector, but the food market is becoming segmented as
disparities in income widen.
Canada: A Macroeconomic
Study of the United States’ Most Important Trade
Partner (September 2006) reports that Canada is a
large exporter to the United States of critical raw materials—including
natural gas, petroleum, and wood products—and a
substantial importer of finished industrial and consumer
goods. Agricultural trade between the two countries continues
to grow in importance, reflecting trade liberalization
and greater integration of agricultural markets.
Global
Agriculture and the Doha Round: Market Access Is the Key
(September 2006) reports that increasing market access
by lowering tariffs has been shown to produce the greatest
share of benefits from agricultural trade liberalization.
Nonetheless, reducing high agricultural tariffs remains
a sticking point in the Doha Round of trade talks.
The
World Bids Farewell to the Multifiber Arrangement (MFA) (February 2006) describes the genesis and consequences
of the MFA, and the impacts of its removal. China, India,
and Pakistan are the cotton-textile-exporting countries
expected to benefit most from the MFA’s demise.
However, global cotton use is largely being driven by
other factors, such as income growth. For the full report,
see The Forces
Shaping World Cotton Consumption After the Multifiber
Arrangement (April 2005).
Agricultural Trade Preferences
and the Developing Countries (May 2005) focuses on
the United States and European Union and finds that trade
preference programs offer significant benefits for some
countries, mostly higher income developing countries.
Nonreciprocal trade preference programs originated in
the 1970s as an effort by high-income developed countries
to provide tariff concessions for low-income countries.
China's New Farm Subsidies
(February 2005) describes new policies that China implemented
in 2004 and assesses their impact on Chinese rural income
and grain production. China introduced direct subsidies
for farmers, began to phase out its centuries-old agricultural
tax, and implemented other policies benefitting farmers.
Processed
Food Trade Pressured by Evolving Global Supply Chains
(February 2005) reports that many factors affect the choice
of locations to produce and sell food products. Patterns
of food trade are strongly influenced by the changing
nature of competition in the global food industryfrom
shifting consumer preferences to the growth in multinational
food retailers and the ways they manage their global supply
chains. Consumer-driven changes are increasingly pushing
food suppliers to meet consumer demand and preferences
at a local level, even as the food industry becomes more
global. For the full reports, see New
Directions in Global Food Markets (February 2005)
and Market Access for
High-Value Foods (February 2005).
European
Union Adopts Significant Farm Reform (September 2004)
examines recent reforms in the European Union's (EU) Common
Agricultural Policy (CAP), which are based on earlier
reforms enacted since 1992. The latest reforms move to
fully decoupled payments through a single farm payment,
which has important implications for WTO negotiations
and EU farmers decisions on what to produce. For
the full report, see CAP
Reform of 2003-04 (August 2004).
U.S.-EU Food and Agriculture
Comparisons (February 2004) provides information and
analysis on a wide range of topics relating to agriculture
in the United States and European Union (EU), including
comparisons of farm structure, production, agricultural
productivity, risk management, environmental and commodity
policy, trade, and food consumption, as well as implications
of EU enlargement for bilateral relations.
China's Food and Agriculture:
Issues for the 21st Century (April 2002) assesses
the issues that will affect China's future trends in consumption,
production, import, and export of food and agricultural
commodities. A series of 13 articles cover China's food
consumption, marketing, international trade, agricultural
policy, transportation infrastructure, regional diversity,
livestock sector, biotechnology, water and irrigation
policy, land tenure system, rural development, employment,
and market information.
Agriculture in Brazil
and Argentina: Developments and Prospects for Major Field
Crops (December 2001) finds that recent increases
in international competitiveness by Argentine and Brazilian
grain and soybean producers likely foreshadow continued
global trade-share gains, particularly for soybeans and
soybean products. Macroeconomic and policy developments,
particularly those related to exchange rates, and infrastructure
improvements will remain central to each country's future
prospects.
Agricultural trade barriers and producer subsidies inflict
real costs, both on the countries that use these policies
and on their trade partners. Among other findings, The
Road Ahead: Agricultural Policy Reform in the WTOSummary
Report (January 2001) indicates that eliminating global
agricultural policy distortions would result in an annual
world welfare gain of $56 billion. Also see the related
report, Profiles of Tariffs
in Global Agricultural Markets (January 2001).
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