scholarly journals Directions of U.S. Farm Programmes under a Freer Trade Environment

2001 ◽  
Vol 40 (2) ◽  
pp. 89-105
Author(s):  
Luther G Tweeten
Keyword(s):  
Crop Insurance ◽  
Commodity Prices ◽  
Commodity Price ◽  
Farm Income ◽  
Price Support ◽  
Agricultural Improvement ◽  
Export Subsidies ◽  
Direct Payments ◽  
Year 2000 ◽  
The U.S

For the new round of WTO multilateral trade liberalisation negotiations to be successful, the world will need to be more enthusiastic and flexible about opening markets. Partisans will need to submerge their self-interests, and the U.S. will need to take the initiative for more open markets. This paper makes the case that only modest changes in the U.S. domestic grain, oilseed, and cotton programmes are needed for compatibility with global free trade. The Federal Agricultural Improvement and Reform (FAIR) Act of 1996 and related policy changes in the 1990s brought fundamental reforms compatible with freer domestic and foreign markets. Chief among these were a shift from coupled deficiency payments to decoupled direct payments, an end to supply management, and less engagement of government in commodity stock accumulation and export subsidies. Converting commodity price support to recourse loans while ending all but administrative cost subsidies to crop insurance would go far to liberalise grain, oilseed, and cotton policies. Unilateral termination of commodity programmes including direct payments totalling 42 percent of net cash farm income in year 2000 would appear to be traumatic to producers. However, reduction of direct payments could be offset (for farm income) by rising farm commodity prices and receipts resulting from (1) less farm output attending lower loan rates and crop insurance subsidies, and (2) world farm commodity price-enhancement from freer global trade.

scholarly journals On the Dynamic Relationship between U.S. Farm Income and Macroeconomic Variables

2009 ◽  
Vol 41 (2) ◽  
pp. 521-528 ◽  
Author(s):  
Jungho Baek ◽  
Won W. Koo
Keyword(s):  
Interest Rates ◽  
Commodity Prices ◽  
Commodity Price ◽  
Farm Income ◽  
Agricultural Commodity ◽  
Macroeconomic Variables ◽  
Distributed Lag ◽  
Dynamic Relationship ◽  
Long Run ◽  
Short Run

This study examines the short- and long-run effects of changes in macroeconomic variables—agricultural commodity prices, interest rates and exchange rates—on the U.S. farm income. For this purpose, we adopt an autoregressive distributed lag (ARDL) approach to cointegration with quarterly data for 1989–2008. Results show that the exchange rate plays a crucial role in determining the long-ran behavior of U.S. farm income, but has little effect in the short-run. We also find that the commodity price and interest rate have been significant determinants of U.S. farm income in both the short- and long-run over the past two decades.

scholarly journals Evaluation of risk management tools for stabilising farm income under CAP 2014-2020

2017 ◽  
Vol 17 (1) ◽  
pp. 3 ◽  
Author(s):  
Alba Castañeda-Vera ◽  
Alberto Garrido
Keyword(s):  
Risk Management ◽  
Public Expenditure ◽  
Crop Insurance ◽  
Farm Income ◽  
Crop Diversification ◽  
Agricultural Policies ◽  
Management Tools ◽  
Direct Payments ◽  
Income Variability ◽  
On Farm

<p>Guaranteeing farm income stability is an objective of the European Union’s and the Spanish agricultural policies. In this paper, CAP direct payments, diversification, crop insurance and an Income Stabilisation Tool (IST) were compared considering (i) their effect on farm income and income stability, (ii) the expected farmers’ willingness for adoption, and (iii) the efficiency of public expenditure invested in supporting them. Main conclusions point at direct payments and  crop diversification as the most effective measures in decreasing income variability. Nevertheless, using crop  insurance or an IST has potential for both improving farm resilience to income variability and limiting public expenditure.</p>

scholarly journals The U.S. Shale Oil Revolution and the Behavior of Commodity Prices

2018 ◽  
Vol 3 (1) ◽  
pp. 27-53 ◽  
Author(s):  
Afees Adebare Salisu ◽  
Idris A. Adediran
Keyword(s):  
Forecast Error ◽  
Commodity Prices ◽  
Error Variance ◽  
Commodity Price ◽  
The United States ◽  
Structural Var ◽  
Oil Price ◽  
Shale Oil ◽  
Horizontal Drilling ◽  
The U.S

The United States is committed to technological improvements in horizontal drilling and hydraulic fracturing in its drive of toppling the world's leading oil producers by the mid-2020s and evolving into a net oil exporter by 2030. Consequently, these technological innovations revolutionized the U.S. oil sector and the international oil market with increasing relevance of the shale oil and attendant shock spillovers to financial and commodity markets. Upon these attractions and consistent with evidence in the literature, we trace the oil price and commodity price dynamics to the shale oil revolution using a recursive structural VAR model of the shale supply shocks. In line with the standard practice of ensuring sensitivity of results, we conduct analyses such as impulse responses, forecast-error variance decomposition, and historical decompositions to accommodate energy and nonenergy commodity components. We show, in addition to the popular view in the extant literature, that the shale oil revolution is not only associated with the recent oil price plunge, but also responsible for the tumble in the total energy-based commodity prices with crude oil price being just a component.

scholarly journals Commodity price pass-through along the pricing chain

2021 ◽  
Author(s):  
Rebeca Jiménez-Rodríguez ◽  
Amalia Morales-Zumaquero
Keyword(s):  
Emerging Economies ◽  
Raw Materials ◽  
Commodity Prices ◽  
Commodity Price ◽  
Emerging Countries ◽  
Consumer Prices ◽  
Advanced Economies ◽  
The World ◽  
Producer Prices ◽  
Pass Through

AbstractThis paper analyses the commodity price pass-through along the pricing chain for the global commodity price index and the indices of its main categories (i.e., agricultural raw materials, food and beverages, energy and metals) in the world, advanced and emerging economies. To do so, the study considers country-by-country vector autoregression models and pool the results by taking weighted means for 18 advanced economies and 19 emerging countries, as well as for the world (defined as the sum of advanced and emerging economies). The results show the following: (i) there is evidence in favour of partial pass-through from commodity prices to producer prices, although the evidence for the pass-through to consumer prices is less evident; (ii) the pass-through in the world seems to be led by both advanced and emerging countries for producer prices and only by advanced economies for consumer prices; (iii) higher prices in the four categories (agricultural raw materials only in the short-run) induce significant higher producer prices in almost all cases, with shocks in the prices of energy and metals showing the largest effects; and (iv) energy prices explain the highest variability of producer and consumer prices.

scholarly journals A Reappraisal of the Prebisch-Singer Hypothesis Using Wavelets Analysis

2021 ◽  
Vol 14 (7) ◽  
pp. 319
Author(s):  
Hany Fahmy
Keyword(s):  
International Trade ◽  
Structural Breaks ◽  
Developing Economies ◽  
Commodity Prices ◽  
Commodity Price ◽  
Data Set ◽  
Price Series ◽  
Long Run ◽  
Starting Point ◽  
The Impact

The Prebisch-Singer (PS) hypothesis, which postulates the presence of a downward secular trend in the price of primary commodities relative to manufacturers, remains at the core of a continuing debate among international trade economists. The reason is that the results of testing the PS hypothesis depend on the starting point of the technical analysis, i.e., stationarity, nonlinearity, and the existence of structural breaks. The objective of this paper is to appraise the PS hypothesis in the short- and long-run by employing a novel multiresolution wavelets decomposition to a unique data set of commodity prices. The paper also seeks to assess the impact of the terms of trade (also known as Incoterms) on the test results. The analysis reveals that the PS hypothesis is not supported in the long run for the aggregate commodity price index and for most of the individual commodity price series forming it. Furthermore, in addition to the starting point of the analysis, the results show that the PS test depends on the term of trade classification of commodity prices. These findings are of particular significance to international trade regulators and policymakers of developing economies that depend mainly on primary commodities in their exports.

scholarly journals Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815–2015

2016 ◽  
Vol 106 (5) ◽  
pp. 574-580 ◽  
Author(s):  
Carmen M. Reinhart ◽  
Vincent Reinhart ◽  
Christoph Trebesch
Keyword(s):  
Capital Flows ◽  
Historical Data ◽  
Commodity Prices ◽  
Commodity Price ◽  
Capital Inflows ◽  
Data Sources ◽  
Financial Capital ◽  
Global Capital ◽  
Sovereign Defaults ◽  
Global Cycles

Capital flow and commodity cycles have long been connected with economic crises. Sparse historical data, however, has made it difficult to connect their timing. We date turning points in global capital flows and commodity prices across two centuries and provide estimates from alternative data sources. We then document a strong overlap between the ebb and flow of financial capital, the commodity price super-cycle, and sovereign defaults since 1815. The results have implications for today, as many emerging markets are facing a double bust in capital inflows and commodity prices, making them vulnerable to crises.

scholarly journals Determinants of Cocoa (Cacao Theobroma) Farmers Uptake of Crop Insurance: Evidence from Ekiti State

2020 ◽  
pp. 96-104
Author(s):  
Olatomide Waheed Olowa ◽  
Omowumi Ayodele Olowa
Keyword(s):  
Crop Insurance ◽  
Risk Preferences ◽  
Household Size ◽  
Farm Income ◽  
Cocoa Bean ◽  
Agricultural Insurance ◽  
Processing Technologies ◽  
Significant Difference ◽  
Household Heads ◽  
Cocoa Farmers

Cocoa farmer faces increasing challenging environment through exposure to risks factors which have impacted negatively on their production or output. Since farmers are primary producers and often times lack capacity to control risks factor, it is important to manage this factors. This study examines the cocoa farmers’ risk preferences and crop insurance perception and isolates the drivers of decision to uptake crop insurance among cocoa farmers in Ekiti state. The sample for the study consist of 200 cocoa farmers who were household heads selected through multi-stage sampling across four Local government areas of Ekiti State who are predominantly cocoa producers. Data collected on socio-demographic characteristics, perception of crop insurance and risk preferences, were analyzed using descriptive statistics and binary logistic model. Results showed that majority of the cocoa farmers were without crop insurance, with higher enrolment in Membership of cooperative society, owned their land, larger household size and lower educational level but higher level of farm experience when compared to cocoa farmers who are holding crop insurance. Farmers risk preferences showed no significant difference between farmers with or without insurance. Education (β=0.59), Household size (β=0.0029) and Debt use (β=0.02), Membership of cooperative (β=-4.53), Farming Experience (β=-2.51), Owned Land (β=-2.19) and Non-Farm Income (β=-0.65) were among the significant determinants of insurance uptake. Risk mitigating measures such as provision of necessary incentives such as improved varieties of cocoa seedling, as well as provision of fertiliser and approved pesticides, financial assistance, and simple processing technologies that produce standard cocoa bean plus a re-jigged Nigeria Agricultural Insurance Corporation (NAIC) for an improved discharge of its function are recommended.

Commodity Price Cycles, the Agricultural Trap, and Thailand's Incessant Subsidies

2019 ◽  
Vol 18 (2) ◽  
pp. 49-69
Author(s):  
Bhanupong Nidhiprabha
Keyword(s):  
Public Investment ◽  
Commodity Prices ◽  
Commodity Price ◽  
Natural Process ◽  
Farm Sector ◽  
Push And Pull Factors ◽  
Excess Supply ◽  
Pork Barrel ◽  
Push And Pull ◽  
Farm Subsidies

During Thailand's economic development, the shares of output and employment in agriculture have been consistently higher than in other countries at the same level of income. There are push and pull factors for labor transformation. This paper demonstrates that the slow transformation from rural to urban economy is the result of the agricultural trap, which keeps agrarian labor inside the farm sector. In addition to the lack of public investment in human capital, extremely wasteful farm subsidies have weakened the natural process of structural transformation. Farm subsidies encourage land expansion, which usually lags behind commodity booms, resulting in the excess supply of farm products. In turn, when commodity prices collapse, excess supply perpetuates further subsidies and emboldens the pork barrel activities of incumbent governments.

scholarly journals An Empirical Analysis of Macroeconomic Variability on the Ghanaian Stock Market: A Vector Autoregression Approach

2016 ◽  
Vol 3 (2) ◽  
pp. 49
Author(s):  
Beverly Acquah
Keyword(s):  
Stock Market ◽  
Interest Rates ◽  
Stock Prices ◽  
Economic Activity ◽  
Price Index ◽  
Vector Autoregression ◽  
Negative Relationship ◽  
Commodity Prices ◽  
Commodity Price ◽  
Macroeconomic Indicators

This study investigates the dynamic interrelationships among stock prices and selected macroeconomic indicators namely; economic activity, global commodity price index, inflation and interest rates in Ghana. By employing a Vector Autoregression (VAR) Model, the empirical results reveal that stock prices depreciate with an increase in global commodity prices and interest rates indicating a negative relationship. On the other hand, stock prices appreciate with an increase in inflation and economic activity indicating a positive relationship. Examining stock market variability on the selected macroeconomic variables also showed that inflation and interest rates respond negatively to changes in asset prices while the stock market itself is not found to be a leading indicator for economic activity. The evidence suggests that the listed equities on the GSE are a hedge against inflation in Ghana. Increasing economic activity over time is advantageous for the Ghanaian stock market.

scholarly journals The price of gold in the year 2000: A forecast

1986 ◽  
Vol 17 (1) ◽  
pp. 43-47
Author(s):  
A. Pouris
Keyword(s):  
Commodity Prices ◽  
Equilibrium Price ◽  
Long Run ◽  
Current Price ◽  
Year 2000 ◽  
Long Run Equilibrium

In this article, two of the most recent efforts to forecast the price of gold are discussed and a prediction for the year 2000 is provided. The forecast is based on the hypothesis that in the long run, commodity prices follow a well-defined path, which permits only gradual and slow changes. The analysis shows that the current price of gold (1985) in terms of US dollars, coincide with the long run equilibrium price simulated by the model. The forecast for the year 2000 suggests that the expected price is US $420 per fine ounce in 1983 constant dollars.

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