Applied Welfare Economics, Trade, and Agricultural Policy Analysis

Cover
Half Title Page
Title Page
Copyright Page
Contents
List of Tables
List of Figures
Acronyms
Acknowledgments
1 Introduction
	1.1 Setting the Agricultural Stage
		1.1.1 Top Agricultural Commodity Producers
		1.1.2 Food Security: Green Revolution and Crop Yields
	1.2 Structure of the Book
	Guide to Literature
2 Project Evaluation Criteria
	2.1 Private Financial Analysis
		2.1.1 Financial Ranking Criteria
		2.1.2 Conclusion
	2.2 Society’s Perspective: Social Cost-Benefit Analysis
		2.2.1 Benefits and Costs as Rent and Surplus
		2.2.2 The Fundamental Equation of Applied Welfare Economics
		2.2.3 Total Economic Value
		2.2.4 Total (Average) Value versus Marginal Value
		2.2.5 Conclusion
	2.3 Multiple Accounts and Alternative Criteria
		2.3.1 Environmental Quality
		2.3.2 Regional Economic Development and Employment: Indirect Benefits
		2.3.3 Other Social Effects
		2.3.4 Concluding Observations about Multiple Accounts
	2.4 Alternative Methods for Evaluating Projects
		2.4.1 Cost-Effectiveness Analysis
		2.4.2 Multiple Criteria Decision-Making
		2.4.3 Life-Cycle Assessment
		2.4.4 Cumulative Effects Analysis
	2.5 Extreme Events and Irreversibility
	2.6 Discounting and Choice of Discount Rate
		2.6.1 Dilemmas in Choosing a Discount Rate in Cost-Benefit Analysis (CBA)
		2.6.2 Risk Adjusted Discount Rates
		2.6.3 Discounting in an Intergenerational Context
	Guide to Literature
	Food for Thought
3 Externalities and Nonmarket Valuation
	3.1 Cost Function Approach
	3.2 Expenditure Function
		3.2.1 Hedonic Pricing
		3.2.2 Recreation Demand and the Travel Cost Method
	3.3 Contingent Methods or Direct Approaches
		3.3.1 Contingent Valuation Method
		3.3.2 Choice Experiments/Stated Preferences
		3.3.3 Constructed Preferences/Stakeholder Method
		3.3.4 Fuzzy and ad hoc Methods for Determining Nonmarket Values
	3.4 Benefit Transfer
	3.5 Concluding Discussion
	Guide to Literature
	Food for Thought
4 International Trade and Applied Welfare Analysis
	4.1 Spatial Price Equilibrium Trade Modeling
	4.2 Unrestricted Free Trade
	4.3 Trade and the Measurement of Well-Being in Multiple Markets
		4.3.1 Vertical Chains
		4.3.2 Vertical and Horizontal Chains
	4.4 Economic Policy and Trade: Examples
		4.4.1 EU Import Restrictions on Canadian Durum Wheat
		4.4.2 Incentivizing Antidumping and Countervailing Duty Complaints: Byrd Amendment
		4.4.3 Restricting Log Exports
	4.5 Concluding Discussion
	Appendix 4.A: Mathematics of Supply Restrictions
	Appendix 4.B: Calculation of Objective Function in SPE Models
	Guide to Literature
	Food for Thought
5 Governance, Rent-Seeking, Global Trade, and the Agreement on Agriculture
	5.1 Institutions and Governance
		5.1.1 Models of Government
		5.1.2 Takings
		5.1.3 Institutions
		5.1.4 Financing Government and Public Projects
	5.2 Land Use and the Principal–Agent Problem
	5.3 International Trade Negotiations and Agriculture
		5.3.1 Agreement on Agriculture
		5.3.2 Agreement on Subsidies and Countervailing Measures
	5.4 Tariff Rate Quota
	5.5 Concluding Discussion
	Guide to Literature
	Food for Thought
6 Analysis of Agricultural Policy: Theory
	6.1 Background to Analysis of Agricultural Policy
	6.2 Stock-Holding Buffer Fund Stabilization
	6.3 Quotas and Supply-Restricting Marketing Boards
		6.3.1 Quota and General Equilibrium Welfare Measurement
		6.3.2 Quota Buyouts
		6.3.3 Designing and Dismantling a Multi-Region Quota Program
	6.4 Price Discrimination
	6.5 Agricultural Technology: Genetically Modified Organisms
		6.5.1 Agricultural Research and Development
		6.5.2 Genetically Modified Organisms
	6.6 Measuring Externalities in Agriculture
	6.7 Concluding Discussion
	Guide to Literature
	Food for Thought
7 Agricultural Policies in the United States and Canada
	7.1 Agricultural Support: A Brief Overview
	7.2 US Agricultural Policy
		7.2.1 Analysis of US Price Support Programs
		7.2.2 Reducing Production and Disposing of Excess Grain
		7.2.3 Decoupling
		7.2.4 Moving Forward
	7.3 Canadian Agricultural Policy
		7.3.1 State Trading: The Canadian Wheat Board (1935–2012)
		7.3.2 Crop Insurance
		7.3.3 Western Grain Stabilization Act (1976)
		7.3.4 Transportation Programs and Subsidies
		7.3.5 Supply Management
	7.4 Concluding Discussion
	Guide to Literature
	Food for Thought
8 Agricultural Policy in Europe and Asia
	8.1 Agricultural Policy Reform in the European Union
		8.1.1 Background to the European Union
		8.1.2 High and Increasing Costs of Agricultural Programs
		8.1.3 Integration of New Members
		8.1.4 Reform of the CAP and Increasing Environmental Concerns
		8.1.5 Further Analysis of Sector-Level Programs
		8.1.6 Brexit
	8.2 Agriculture in Developing Countries
		8.2.1 Economy-wide Economic Reform and Chinese Agriculture
		8.2.2 India and the Rice Economy
	Guide to Literature
	Food for Thought
9 Agricultural Business Risk Management
	9.1 Privatizing Agricultural Hedges: Financial Products versus Insurance
		9.1.1 Index Insurance and Derivatives
		9.1.2 Futures Trading and Options
	9.2 Agricultural Business Risk Management in the United States
		9.2.1 Deep Loss Protection: The Federal Crop Insurance Program
		9.2.2 Agricultural Business Risk Management Programs in the 2008 Farm Bill
		9.2.3 Agricultural Business Risk Programs in the 2014 and 2018 Farm Bills
		9.2.4 Dairy
		9.2.5 Trade Issues
	9.3 Agricultural Business Risk Management in Canada
		9.3.1 The Shift from Price Support to Risk Management
		9.3.2 Enter Growing Forward
		9.3.3 Shift from Growing Forward to Growing Forward 2
		9.3.4 Evaluation of Canada’s Agricultural Business Risk Programs
		9.3.5 Going Forward: Canadian Agricultural Partnership
	9.4 Concluding Discussion: Lessons for Agricultural Business Risk Management
		9.4.1 Do Agricultural BRM Programs Distort Production?
		9.4.2 Comparison of US and Canadian Approaches to Risk Management
	Appendix 9.A: A Brief Look at the Economics of Risk and Risk Aversion
		9.A.1 Systemic versus Idiosyncratic Risk
		9.A.2 Expected Income Maximization and the Risk Aversion Coefficient
	Guide to Literature
	Food for Thought
10 Climate Change and Applied Welfare Economics
	10.1 Anthropogenic Climate Change and Its Impact
		10.1.1 Climate Sensitivity
		10.1.2 Damages
	10.2 Economic Evaluation: The Role of Integrated Assessment Models
		10.2.1 Climate Models and Policy Models
		10.2.2 Carbon Price as a Policy Variable
	10.3 Economic Impacts of Climate Change on Agriculture
		10.3.1 Land Rents and the Regression Approach
		10.3.2 Mathematical Representation of Landowner Decisions
	10.4 Climate Change and Food Security
	10.5 Discounting and Climate Urgency
		10.5.1 Discounting Carbon
		10.5.2 Economics of Wood Biomass Energy: Climate Urgency and Discounting
	10.6 Mitigating Climate Change
		10.6.1 International Action to Mitigate Climate Change
		10.6.2 Agricultural Role in Mitigating Climate Change
		10.6.3 Managing for Carbon: Carbon Pools and Fossil Fuel Substitution
	10.7 Discussion
	Guide to Literature
	Food for Thought
References
Index