Document Type
Thesis - University Access Only
Award Date
2008
Degree Name
Master of Science (MS)
Department / School
Economics
Abstract
The main objective of this study is to analyze the effects of: a) reducing domestic farm program support, b) replacing the Counter-cyclical Payment Program with the propose Counter-cyclical Revenue Program (CCR) and c) replacing both the Countercyclical Payment Program (CCP) and the Loan Deficiency Payments (LDP) with the Revenue Counter-cyclical Program (RCCP) on South Dakota farmers. The WTO has been advocating for substantial cuts in trade-distorting farm support programs as per the July, 2004, Framework Agreement. The United State Department of Agriculture (USDA) and the National Com Growers Association (NCGA) respectively proposed to replace the CCP and the LDP with the CCR and the RCCP. Both the CCR and the RCCP are revenue based farm programs that use crop prices and yields for the calculation of the per acre revenue payments to the farmer. A representative farm model with Spink County yield data and South Dakota price data is used to determine the impacts of these farm program changes. FAPRl baseline prices and the needed cuts in target prices and loan rates were used to heed WTO cuts in domestic farm support programs. A multivariate empirical parameter distribution along with a stochastic simulation model was used to capture the impacts of these program changes in terms of future stream of prices and yields for the representative farm. Under the average and maximum yield and price conditions, a 60 percent reduction in domestic farm support programs in the US resulted in no impact on farm income for South Dakota because of exceptionally high crop prices during 2007/08. Under the minimum yield and price conditions, the 60 percent cut resulted in a loss of 57.1 percent LDP and 16.8 percent CCP receipts to the representative farm over the five year period. It was estimated that no CCR and RCCP payments would accrue to the representative farm for the years 2007/08 through 2011/12 as the simulated prices for the program crops during this period were relatively high. Accordingly, the impacts of CCR and RCCP on the representative farm were analyzed assuming that these programs were in place during the years 2002/03 through 2006/07. Replacing the CCP with the CCR would have provided an additional farm income of $60,000 to the representative farm over the five-year period. Replacing the LDP and CCP with the RCCP during this same period would have reduced the total receipts for the representative farm by 35 percent. Based on this analysis the CCR provides a better safety net for South Dakota farmers.
Library of Congress Subject Headings
Agricultural price supports
Agriculture -- Economic aspects -- South Dakota
Agricultural laws and legislation -- United States
World Trade Organization
Format
application/pdf
Number of Pages
231
Publisher
South Dakota State University
Recommended Citation
Kyei, Fordjour Y., "Analysis of WTO Related Domestic Farm Support Reductions and Counter-Cyclical Revenue Proposals in the US : Farm-Level Effects for South Dakota" (2008). Electronic Theses and Dissertations. 1449.
https://openprairie.sdstate.edu/etd2/1449
