The Political Economy of U.S. Export Subsidies for Wheat
In: The Political Economy of American Trade Policy
During 1985-93 the U.S. Government provided $4.9 billion in subsidies to targeted foreign buyers of U.S. wheat under its Export Enhancement Program (EEP). The subsidies averaged $31 per metric ton, or about 25 percent of the U.S. price. The EEP generates a small gain to U.S. farmers, compared to its costs. Lacking a clear economic justification, the debate on the EEP indicates the following were the key factors in its political success: farmers and agribusiness have been unified in support of the program, and have excellent political channels through which to express their views; domestic users of wheat have not opposed the program; and the program received an initial boost because of its use of large government-owned wheat stocks, allowing it to be treated as budget neutral in Congress. An economic argument that carried political weight was that the EEP, by increasing the costs of the European Community's wheat export subsidies, would encourage them to negotiate joint U.S./EC subsidy reductions. In fact, the EC in 1993 did agree to multilateral subsidy reductions in the GATT, as well as reforming their own policies unilaterally. But it remains questionable whether this outcome justifies the EEP.
(This abstract was borrowed from another version of this item.)
|This chapter was published in: ||This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number
8708.||Handle:|| RePEc:nbr:nberch:8708||Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paarlberg, Robert L., 1990. "The Mysterious Popularity of EEP," Choices, Agricultural and Applied Economics Association, vol. 5(2).
- Bailey, Kenneth W. & Houck, James P., 1989. "An Analysis of the Export Enhancement Program for Wheat," CNFAP Staff Reports 244129, Food and Agricultural Policy Research Institute (FAPRI).
When requesting a correction, please mention this item's handle: RePEc:nbr:nberch:8708. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.