ARE120%20LN03~2008

ARE120%20LN03~2008 - Policies, Programs and Prospects for...

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Farm Bill 101: Policies, Programs and Prospects for 2007 Julian M. Alston Department of Agricultural and Resource Economics University of California, Davis President’s Advisory Commission on Agriculture and Natural Resources Spring 2007 Meeting April 26-27, 2007 (Revised April 10, 2008 for ARE-120)
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Timeline, 1933-1998
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Context for the 2007 Farm Bill •G e n e s i s – started in the 1930s • Agricultural Adjustment Act of 1933 (as amended 1938) • Agricultural Act of 1949 – renewed every five years or so (1990, 1996, 2002, 2007) • Large and complex – mandates spending on some programs – authorizes $$$ for other programs for which actual spending is determined by appropriations bills • Operates in conjunction with a host of other policies – rural, resource, and farm commodity policies – trade policies (WTO, other trade agreements)
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USDA Program Expenditure in 2007 Percent of Total billions of dollars percent Food, Nutrition, & Consumer Services 54.4 43.3 Farm Service Agency 33.9 27.0 Rural Development 14.4 11.5 Natural Resources & Environment 7.7 6.1 Foreign Agricultural Service 5.2 4.1 Risk Management 4.2 3.3 Research, Education, & Economics 2.3 1.8 Marketing & Regulatory Programs 1.7 1.4 Other 1.8 1.4 TOTAL 125.6 100.0
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Commodity Subsidy Overview • ~ $20 billion for producers of “program crops” – averages 20% of revenue for grains, oilseeds, and cotton • 50% or more for rice or cotton in some years – most commodities get little subsidy • e.g. 70% of California agriculture •O t h e r s u b s i d i e s – environmental programs • CRP idling 35 million acres, etc. – dairy price supports – crop insurance, widespread and growing – disaster payments • Other (non farm bill) policies and programs (payments, regulations, or trade barriers) support some other commodities
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Headline Crop Programs • An array of programs, details differ by crop –d i r e c t p a ym e n t s – marketing loans – counter-cyclical payments – crop insurance subsidies – export credit guarantees for buyers of US commodities • Total subsidy varies inversely with price
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This note was uploaded on 05/03/2008 for the course ARE 120 taught by Professor Alston during the Spring '08 term at UC Davis.

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ARE120%20LN03~2008 - Policies, Programs and Prospects for...

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