This manuscript discusses the ongoing debate surrounding the involvement of the Canadian Wheat Board in international trade. The paper outlines a simple test of the ability of the CWB to price discriminate among export markets for the 1980/81 to 1994/95 period. The study finds evidence of the ability of the CWB to price discriminate. It also shows that the magnitude and significance of price discrimination increased during the operation of the U.S. Export Enhancement Program from 1985/86 to 1994/95.

In 1995/96, the government of Turkey imposed an export tax of 20 cents/kg on Aegean cotton and an ad-valorem import duty of one percent on non-aegean cotton. The simulation results for the Aegean market indicate that consumers gained $44.5 million in consumer surplus because the export tax reduced the purchase price of Aegean cotton. The Turkish government extracted export tax revenue equal to $11.6 million, but provided water, fertilizer, and credit subsidies equal to $22.2 million. Producers lost $35 million in producer surplus due to the lower domestic price caused by the export tax. However, while these numbers represent large transfers from producers to consumers, the net inefficiency due to government distortions amount to only $1.14 million in the Aegean market. Adding this number to the dead-weight loss of only $790,000 obtained from the non-Aegean market simulation, the net inefficiency caused by government intervention in Turkish raw cotton markets was only $1.93 million in 1995/96. If one considers that cotton producers in Turkey realized gross revenue of over $1.4 billion across all markets in 1995/96, the results of the analysis seems to indicate that the income transfer associated with Turkish government programs is not very inefficient.

This paper provides a methodology that can be used to weigh the costs and benefits of precision agriculture in the measurement and application of variable-rate production technology. Empirical estimates of the economic value of precision farming in the form of variable-rate fertilizer application to corn fields in the mid-western United States are calculated and compared to the current cost of investing in this technology. The results of this study indicate that the use of precision technology in the application of fertilizer for corn production in the United States is not profitable over a relatively wide range of corn prices, nitrogen prices, and agronomic differences in soil characteristics.

Contains a dynamic programming algorithm for projecting policy parameters based on a storage model of international markets featuring uncertainty, forward-looking rational expectations and non-negative storage. This algorithm is motivated by the need for a non-analytical solution to the competitive equilibrium in a storage model of U.S. and foreign cotton policy regimes. Obtaining an analytical solution is difficult, except in a limited number of special cases. The numerical solution algorithm essentially consists of multiple nested numerical approximations that reach convergence simultaneously when the relationship between domestic storage and expected farm price achieves stationarity. Given the stationary relationship between storage and expected farm price, we then run the model forward in time (given a sequence of annual realized yield disturbances) under alternative policy regimes representing FACT and FAIR.

The theory of factor market distortions deals largely with taxing inputs. However, input subsidies are not only common in manufacturing. For example, U.S. agriculture is heavily dependent on input subsidies.
If water subsidies in the production of California cotton were removed, along with commodity payments, production of cotton in California would likely cease. Likewise, transportation subsidies were common in both the U.S. and Canada, and still prevail in the U.S.

The economic theories of New Institutional Economics, auctions, and welfare economics are used to analyze the potential for E-Commerce as an institution within the agricultural sector. We discuss the theory of the firm within the NIE paradigm and focus on the potential for E-Commerce to reduce transaction costs, search costs, and the costs associated with buying and selling livestock under various auction formats. We develop a theoretical model that captures the effect of Internet feeder-cattle auctions on Florida’s cattle market at three different levels in the marketing channel. We discuss the institutional arrangements and marketing mechanisms associated with the marketing of stocker and feeder cattle in Florida. We present the results of a survey distributed to cattle producers in North Florida regarding herd size, direct transaction costs of marketing cattle, and the implications of internet technology. Finally, we perform an empirical welfare analysis in order to estimate the impact of reduced transaction costs associated with Internet and video livestock auctions on cow-calf operators and backgrounders in Florida.