apca the case for supply management: corn in the usa agricultural policy analysis center - the...

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A A P P C C A A The Case for The Case for Supply Supply Management: Management: Corn in the USA Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN 37996 www.agpolicy.org - phone: (865) 974-7407 - fax: (865) 974-7298 Daniel De La Torre- Ugarte Workshop on Mutually Supportive Agricultural and Trade Policies January 19-23, 2005 Chapecó, Brazil

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Page 1: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

AAPP CCAA

The Case for The Case for Supply Supply

Management: Management:

Corn in the Corn in the USAUSA

Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN 37996www.agpolicy.org - phone: (865) 974-7407 - fax: (865) 974-7298

Daniel De La Torre-Ugarte

Workshop on Mutually Supportive Agricultural and

Trade Policies

January 19-23, 2005Chapecó, Brazil

Page 2: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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El Caso a favor El Caso a favor de la Gestión de la Gestión de la Oferta: de la Oferta: Maíz en los Maíz en los

Estados UnidosEstados Unidos

Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN 37996www.agpolicy.org - phone: (865) 974-7407 - fax: (865) 974-7298

Daniel De La Torre-Ugarte

Seminario Sobre Políticas Agrícolas y Comerciales

Solidarias

Enero 19-23, 2005Chapecó, Brasil

Page 3: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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The Change to Decouple The Change to Decouple PaymentsPayments

0

5,000

10,000

15,000

20,000

25,000

1990 1992 1994 1996 1998 2000

mill

ion

dolla

rs

Deficiency Direct LDP & MLG

Emergency Conservation Other

Page 4: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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El Cambio a Subsidios El Cambio a Subsidios Desvinculados de la Desvinculados de la

ProducciónProducción

0

5,000

10,000

15,000

20,000

25,000

1990 1992 1994 1996 1998 2000

mill

ione

s do

lare

s

Deficiency Direct LDP & MLG

Emergency Conservation Other

Page 5: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Problems with Continuing Problems with Continuing Current US Agricultural PolicyCurrent US Agricultural Policy

• Prices projected to remain below the cost of production

• Continued “dumping”

• Large government payments in the US

• Depressed crop prices worldwide

Page 6: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Continuación de las Continuación de las Políticas ActualesPolíticas Actuales

• Más de lo mismo

• Precios e ingresos agrícolas van a mantenerse estancados

• Pagos del gobierno seguirán siendo altos

Page 7: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Farmer-OrientedFarmer-OrientedPolicy BlueprintPolicy Blueprint

• Manage the Use of the Production Capacity

• Minimum and Maximum Prices

• Set-Aside: Short / Mid/ Long Term Land Retirement Program

• Stock Management

Page 8: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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BOSQUEJO DE POLÍTICA BOSQUEJO DE POLÍTICA ORIENTADA HACIA EL ORIENTADA HACIA EL

AGRICULTORAGRICULTOR• Gestión del Uso de la Capacidad

Productiva

• Precios mínimo y máximo

• Retiro de tierras a corto/mediano/largo plazo

• Administración/Gestión de inventarios

Page 9: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Farmer-Oriented Blueprint: Farmer-Oriented Blueprint: US Corn Price VariabilityUS Corn Price Variability

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

2003 2004 2005 2006 2007 2008 2009 2010 2011

dolla

rs p

er b

ushe

l

Higher and more stable corn prices

Baseline

}Price band under Farmer-Oriented Blueprint

Page 10: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Bosquejo Orientado al Agricultor: Bosquejo Orientado al Agricultor: Variación del Precio de Maíz, Variación del Precio de Maíz,

EEUUEEUU

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

2003 2004 2005 2006 2007 2008 2009 2010 2011

dolla

rs p

er b

ushe

l

Precios del maíz más altos y estables

Base

}Banda de precios bajo el bosquejo orientado hacia el agricultor

Page 11: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Farmer-Oriented Blueprint: Farmer-Oriented Blueprint: US Net Farm Income VariabilityUS Net Farm Income Variability

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

2003 2004 2005 2006 2007 2008 2009 2010 2011

mill

ion

dolla

rs

Slightly higher and reduced variability in Net Farm Income

Baseline

}Price band under Farmer-Oriented Blueprint

Page 12: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Bosquejo Orientado al Agricultor: Bosquejo Orientado al Agricultor: Variación del Ingreso Agrícola Variación del Ingreso Agrícola

NetoNeto

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

2003 2004 2005 2006 2007 2008 2009 2010 2011

mill

ion

dolla

rs

Ligeramente mayor en promedio y menor variabilidad en ingreso neto

Base

}Banda de Ingreso bajo el bosquejo orientado hacia el agricultor

Page 13: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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This Is Only A BlueprintThis Is Only A Blueprint• Alternative supply management instruments

should be considered base on the experience of each country

• Supply management would only be needed in surplus countries

• Supply Management benefits all producers:– Price increases more than reduction in

production– Countries in the South get higher prices and can

produce more

Page 14: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Éste es Sólo un BosquejoÉste es Sólo un Bosquejo

• Se deben considerar formas alternativas para administrar la producción en base a la experiencia de cada país

• La administración de la oferta solo seria necesaria en países exportadores

• La administración de la oferta beneficia a todos los agricultores:

– Precio sube mas que la reducción de la oferta– Países del Sur reciben transferencia de recursos

vía mayor precio y mayor volumen

Page 15: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Hectares (Million Ha) No data # Ha Prod Yield (4,479) <1 - 0.5 115 12% 6% 1,625 Production CR4: 69% CR8: 80%0.5 - 1 16 8% 4% 2,699 Plantings CR4: 51% CR8: 66% 1 - 5 17 25% 18% 3,913 World plantings 142 Million Ha. (10% of the world arable land) 5 - 20 4 24% 12% 2,114 World production 637 Million Tn.20 - 29 2 37% 58% 4,854 World exports 78 Million Tn. Ratio prod vs exports 12%

CORN WORLD PLANTING DISTRIBUTION, 2003

20% United States(40% production)

17% China(18% production)

9% Brazil(8% production)

5% Mexico(3% production)

5% India(2% production)

4% European Union(6% production)

2% Indonesia(2% production)

2% south Africa(2% production)

2% Argentina(2% production)

56%

11%

8%

1%

<1%

2%

19%

<1% 10%

5%<1%

6%

4%

3%2%

Exports CR4: 76% CR8: 79% # 113Imports CR4: 40% CR8: 56% # 185

Page 16: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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RICE WORLD PLANTING DISTRIBUTION, 2003

Hectares (Million Ha)

No data # Ha Prod Yield (3,904) <1.0 - 1.0 94 8% 8% 3,968 1.0 - 2.2 4 4% 5% 4,980 2.2 - 7.4 6 15% 13% 2,929

7.4 - 12.0 4 26% 25% 3,79729.0 - 43.0 2 47% 51% 4,326

19% China(31% production)

28% India(21% production)

8% Indonesia(9% production)

7% Bangladesh(6% production)

5% Vietnam(6% production)

4% Myanmar(4% production)

6% Thailand(4% production)

30%

14%

2%

9%14%12%7%

2%

7%

3%

3%

5%

4%

4% 3%4%

Planting CR4: 62% Planting CR8: 80%Production CR4: 66% Production CR8: 82%

World plantings 153 Million Ha. (11% of the world arable land)World production 607 Million Tn.World exports 28 Million Tn. Ratio prod vs export 5%

Exports CR5: 80% CR10: 94% CR15: 97%

Imports CR5: 23% CR10: 40% CR15: 52%

Page 17: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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ConclusionsConclusions

• US is exporting poverty because it no longer manages supply

• A farmer-oriented policy is possible

• Changing US policy alone is not enough, international cooperation is needed

• Supply Management addresses the price issue does not solve all the problems

Page 18: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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ConclusionesConclusiones• EEUU está exportando pobreza al no

administrar la oferta

• Política orientada-hacia-el-agricultor es posible

• Cambio sólo en la política de EEUU no es suficiente; es necesaria la cooperación internacional

• La gestión de la oferta no resuelve el problema del precio, pero no todos los problemas

Page 19: APCA The Case for Supply Management: Corn in the USA Agricultural Policy Analysis Center - The University of Tennessee - 310 Morgan Hall - Knoxville, TN

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Agricultural Policy Analysis Center The University of Tennessee 310 Morgan Hall 2621 Morgan Circle Knoxville, TN 37996-4519

www.agpolicy.org