lecture 2 – global trends in agriculture
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Lecture 2 – Global Trends in Agriculture. EconS350 Fall Semester, 2010. Domestic policy. “The Farm Bill” is the most important piece of policy for US agriculture Defines objectives for the US food economy domestically. - PowerPoint PPT PresentationTRANSCRIPT
Lecture 2 – Global Trends in Agriculture
EconS350Fall Semester, 2010
Domestic policy
• “The Farm Bill” is the most important piece of policy for US agriculture
• Defines objectives for the US food economy domestically.
• Most recent version is the “Food, Conservation, and Energy Act of 2008”.
Brief history of US agriculture policy
• Agricultural Adjustment Act (AAA), 1933– Provided price and income support programs
• Food and Agriculture Act of 1965– Tried to reduce price supports
• 1985 Food Security Act & 1990 Food, Agriculture, Conservation, and Trade Act– Encouraged marketing of commodities rather than relying on selling to government.
• 1996 Federal Agriculture Improvement and Reform Act– “Decoupled payments”: government payments are not tied to a farmer’s current
production decisions.
• Supply controls and price supports lead to “inefficiencies”. – Produce more than what is demanded, etc.
2008 Farm Bill
Farm bill payments
Conservation payments in the Farm Bill
US agriculture and foreign markets
• 1910-1914: “Golden age” for US agriculture
• 1920’s saw drop in prices that led to the Smoot-Hawley tariffs.
• Volume of US ag exports fell by 20% from 1920s to 1930s.
• Exports increased only in the 1970s.
US agriculture and foreign markets
US agriculture and foreign markets
Global production of major crops
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
0
50
100
150
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250
0
20
40
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100
SoybeansRest of World
China
Argentina
Brazil
USA
Area
Mill
ion
Ton
s
Mill
ion
Hec
tare
s
Global production of major crops
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
0
100
200
300
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800
0
20
40
60
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Maize
Rest of World
Argentina
India
Mexico
Brazil
China
USA
Area
Mill
ion
Ton
s
Mill
ion
Hec
tare
s
Global production of major crops
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
0
100
200
300
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900
0
50
100
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Wheat
Rest of World
Germany
Canada
France
USA
India
USSR (former)
China
Area
Mill
ion
Ton
s
Mill
ion
Hec
tare
s
World trade policy• Doha Round
– Follows the Uruguay Round (1982) and the GATT (General Agreement on Tariffs and Trade, 1949).
– Multilateral trade negotiation under the World Trade Organization– Started in 2001 and still going
• Conflict between rich and poor countries– Developed or richer: US, EU, Japan– Developing or poorer: Brazil, China, Russia, India
• Points of conflict– Improve market access by cutting tariffs– Reduce export subsidies– Reduce trade distorting domestic support– Consider non-trade concerns such as food security, environmental protection, rural
development, poverty alleviation.
World trade policy
• Agriculture is THE FOCAL POINT of conflict in multilateral trade negotiations.
• Knowledge of these “macro” level factors is a critical part of being an effective farm manager.