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Identifying the Real Winners from U.S. Agricultural Policies

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  • Timothy A. Wise
Abstract
In this paper, we argue that advocates for new U.S. agricultural trade policies should consider refocusing their campaigns on the corporate livestock sector rather than farmers. There is little evidence that farmers as a group are reaping significant gains from current U.S. agricultural subsidy programs, even though they are the direct recipients. Low prices and high costs have left farmers with stagnant or declining net farm incomes. Furthermore, there is little conclusive evidence that the removal of U.S. subsidy payments would significantly reduce production or raise prices, though there is significant disagreement on this point. There is wider agreement that U.S. farm policies contribute significantly to depressed prices for agricultural commodities. Among the beneficiaries of those low prices are the consumers of U.S. grains and oilseeds, notably the concentrated animal feeding operations that now dominate the U.S. livestock industry. These industrial operations get feed that is generally sold at below farmers’ costs of production. We raise two questions for future research, and provide tentative answers. First, would U.S. policies that ensure higher feed prices reduce the incentives toward concentrated feeding operations and tip the economic balance back toward diversified family farmers? Initial research suggests that the economic benefits of current policies to corporate livestock operators are significant and that their reform could contribute to structural change in the farm sector in favor of family farmers. Second, since subsidies to feed are not now treated as highly disciplined input subsidies for livestock operations under World Trade Organization rules, would a more accurate accounting bring U.S. subsidies above the maximum levels allowed in the prevailing Agreement on Agriculture? We present initial calculations that suggest such an accounting change would put the United States over is limit for 2000 and nearly over for 2001.

Suggested Citation

  • Timothy A. Wise, "undated". "Identifying the Real Winners from U.S. Agricultural Policies," GDAE Working Papers 05-07, GDAE, Tufts University.
    • Handle: RePEc:dae:daepap:05-07
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    References listed on IDEAS

    as
    1. Timothy A. Wise, "undated". "Understanding the Farm Problem: Six Common Errors in Presenting Farm Statistics," GDAE Working Papers 05-02, GDAE, Tufts University.
    2. Ken Shadlen, "undated". "Policy Space for Development in the WTO and Beyond: The Case of Intellectual Property Rights," GDAE Working Papers 05-06, GDAE, Tufts University.
    3. Marion Desquilbet & Herve Guyomard, 2002. "Taxes and subsidies in vertically related markets [Taxes et subventions dans des marchés liés verticalement]," Post-Print hal-02670379, HAL.
    4. Jonathan M. Harris & Neva R. Goodwin, "undated". "Reconciling Growth and Environment," GDAE Working Papers 03-03, GDAE, Tufts University.
    5. Adams, Gary M. & Young, Linda M., 1998. "Structural Developments In The U.S. Grains Subsector," Proceedings of the 4th Agricultural and Food Policy Systems Information Workshop 1998: Economic Harmonization in the Canadian\U.S.\Mexican Grain-Livestock Subsector; 16768, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    6. Jonathan M. Harris, "undated". "Macroeconomic Policy and Sustainability," GDAE Working Papers 01-09, GDAE, Tufts University.
    7. McBride, William D. & Key, Nigel D., 2003. "Economic And Structural Relationships In U.S. Hog Production," Agricultural Economic Reports 33971, United States Department of Agriculture, Economic Research Service.
    8. David Dapice, "undated". "Current Economic Conditions in Myanmar and Options for Sustainable Growth," GDAE Working Papers 03-04, GDAE, Tufts University.
    9. Neva R. Goodwin, "undated". "Five Kinds of Capital: Useful Concepts for Sustainable Development," GDAE Working Papers 03-07, GDAE, Tufts University.
    10. Marion Desquilbet & Hervé Guyomard, 2002. "Taxes and Subsidies in Vertically Related Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1033-1041.
    11. Timothy A. Wise, "undated". "The Paradox of Agricultural Subsidies: Measurement Issues, Agricultural Dumping, and Policy Reform," GDAE Working Papers 04-02, GDAE, Tufts University.
    12. Frank Ackerman & Timothy A. Wise & Kevin P. Gallagher & Luke Ney & Regina Flores, "undated". "Free Trade, Corn, and the Environment: Environmental Impacts of US – Mexico Corn Trade Under NAFTA," GDAE Working Papers 03-06, GDAE, Tufts University.
    13. Timothy A. Wise, "undated". "Identifying the Real Winners from U.S. Agricultural Policies," GDAE Working Papers 05-07, GDAE, Tufts University.
    14. Gallagher, Kevin P. & Aguayo, Francisco, 2003. "Economic Reform, Energy, and Development: The Case of Mexican Manufacturing," Working Papers 15575, Tufts University, Global Development and Environment Institute.
    15. Aguayo, Francisco & Gallagher, Kevin P., 2005. "Economic reform, energy, and development: the case of Mexican manufacturing," Energy Policy, Elsevier, vol. 33(7), pages 829-837, May.
    16. Skaggs, Rhonda K. & Falk, Constance L., 1998. "Market And Welfare Effects Of Livestock Feed Subsidies In Southeastern New Mexico," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(2), pages 1-13, December.
    17. Shadlen, Ken, 2005. "Policy Space for Development in the WTO and Beyond: The Case of Intellectual Property Rights," Working Papers 15577, Tufts University, Global Development and Environment Institute.
    18. Dapice, David, 2003. "Current Economic Conditions in Myanmar and Options for Sustainable Growth," Working Papers 15582, Tufts University, Global Development and Environment Institute.
    19. Goodwin, Neva R., 2003. "Macroeconomics for the 21st Century," Working Papers 15581, Tufts University, Global Development and Environment Institute.
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    2. Ackerman, Frank & Stanton, Elizabeth A., 2006. "Can Climate Change Save Lives? A comment on “Economy-wide estimates of the implications of climate change: Human health"," Working Papers 37240, Tufts University, Global Development and Environment Institute.
    3. Timothy A. Wise, "undated". "Identifying the Real Winners from U.S. Agricultural Policies," GDAE Working Papers 05-07, GDAE, Tufts University.
    4. Paus, Eva A. & Gallagher, Kevin P., 2006. "The Missing Links between Foreign Investment and Development: Lessons from Costa Rica and Mexico," Working Papers 37156, Tufts University, Global Development and Environment Institute.
    5. Molly Anderson, 2008. "Rights-based food systems and the goals of food systems reform," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 25(4), pages 593-608, December.
    6. Elanor Starmer & Aimee Witteman & Timothy A. Wise, "undated". "Feeding the Factory Farm: Implicit Subsidies to the Broiler Chicken Industry," GDAE Working Papers 06-03, GDAE, Tufts University.
    7. Schouten, Greetje & Glasbergen, Pieter, 2012. "Private Multi-stakeholder Governance in the Agricultural Market Place: An Analysis of Legitimization Processes of the Roundtables on Sustainable Palm Oil and Responsible Soy," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(B), pages 1-26, December.
    8. Julie A. Nelson, "undated". "Ethics and International Debt: A View from Feminist Economics," GDAE Working Papers 06-04, GDAE, Tufts University.

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