U.S. rice policy and support to U.S. farmers: implications for WTO domestic support commitments
2003
Lee, D. S. | Hoffman, L. A. | Cramer, G. L.
U.S. government programs and support for rice farmers have been important to rice production and crop income for more than 70 years. The 1996 farm bill focused on producing for the domestic and international market. Government support was minimal until 1998, even though farmers had available the marketing loan program, decoupled production flexibility contracts, crop and revenue insurance subsidies, ad hoc market loss assistance payments, and export assistance programs. Because of high prices and increased farm output, production and stocks reached high levels and prices plunged very low. Therefore, the 2002 farm bill continued most of the provisions of the 1996 bill but provided higher direct payments, countercyclical payments, and target prices to maintain a reasonable farm safety net. The U.S. provides less agricultural support than some other countries. The URAA ceiling for current aggregate measurement of support for U.S. farmers is $19.1 billion compared with $60 billion for the EU and $30 billion for Japan. The impacts of the URAA on the global rice market have been profound. However, the global rice market continues to be characterized by high levels of trade intervention such as state trading enterprises, high-bound tariff rates, and limited market access gains from tarification. As a result, WTO member countries submitted proposals on how they intend to further liberalize agricultural trade, which includes the elimination of export subsidies and a further reduction in tariffs and domestic support.
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