Dairy disaggregation and joint production in an economy‐wide model*‡

We examine the impact of dairy disaggregation and joint production on trade liberalisation outcomes in an economy‐wide model. Depending on parameterisation, our model includes either (i) a single dairy commodity, (ii) several dairy commodities without joint production or (iii) several dairy commodities with joint production. In a numerical application, we consider the removal of US tariffs on dairy exports from New Zealand (the world’s largest dairy exporter). We show that failing to account for joint production when dairy commodities are disaggregated leads to misleading results. Our preferred dairy production function differs from those used in other applied trade models. Our analysis can be used to determine when accounting for joint production in other sectors is important.     

Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry*

During the negotiations on the Australia–US free trade agreement (AUSFTA), the US dairy industry vigorously opposed opening the US market to imports of Australian dairy products on the grounds that the US industry would be devastated. Subsequently, the agreement signed in February 2004 made an exception for dairy, providing for only limited quota expansion and no free trade, even at the end of the long implementation period. This paper presents a simulation model of world dairy markets, represented by supply and demand equations for fat and non‐fat components of milk and manufactured dairy products. We use the model to analyse the effects on US milk markets of both a hypothetical agreement, allowing free bilateral trade in dairy products, and the actual AUSFTA. An important contribution to the literature is the derivation of explicit supply and demand relationships for milk components. The components model allows an analysis of long‐term production, consumption, and trade patterns that is not tied to specific, fungible products. Simulations indicate that increased imports from Australia resulting from bilateral trade liberalisation would have resulted in small reductions in US milk prices and production. The much smaller increases in Australian access to the US market under the actual AUSFTA will have even smaller, almost negligible, impacts.     

Economics and politics of food standards,trade, and development#

Standards have played an important role in food trade for a very long time. Their rapid growth in recent years has triggered vigorous debates on their impacts on international trade and development, with many arguing that standards are “non‐tariff barriers” to trade and that standards are marginalizing the poor. I present conceptual frameworks and review empirical evidence on the equity and efficiency effects and the political economy of standards. Models which incorporate essential aspects of standards yield complex theoretical results and nuanced conclusions. Careful empirical analyses support such nuanced arguments and find complex effects. For trade, standards can create welfare gains but also involve rent redistribution which induces lobbying by interest groups to set the standards at their preferred level. This makes it difficult to distinguish socially desirable standards from those resulting from political rent‐seeking. For development, it is crucial to explicitly account for (a) the endogeneity of the institutional organization of value chains and (b) both smallholder contracting and employment creation on large scale farms when considering the impact of standards on development and poverty.     

Food Label Regulations in the United States and European Community:

Growing interdependence among the world's food markets presents increased trade and investment opportunities for food firms. Although international trade agreements have recently been negotiated which will likely lead to increased food trade, especially among Western nations, revised product standards and technical regulations used in the course of implementing these agreements have potential to create trade barriers that are less obvious. This paper assesses recent developments in food quality and labeling regulations in the European Community (EC) and United States. The regulatory changes taking place in these large trading partners have the potential to result in trade barriers based on meeting technical standards, especially since the reforms are being pursued independently in each country.     

济南市水权市场问题初探

从水资源费的合理征收、地区间及地区内水权交易、中水资源交易以及排污权交易等5个方面分析了济南市的水权市场问题。指出了通过建立水市场，进行水权交易来重新配置水资源是缓解济南市水资源短缺的最有效途径之一。     

Modeling differentiated quality standards in the agri-food sector: the case of meat trade in the enlarged EU

Quality standards play an increasingly important role in international agri-food trade, and their functioning as nontariff barriers to trade is widely discussed. We argue that food quality standards imposed by importing countries are more than just border measures and can have profound effects on the market structure of the exporting industry, thereby significantly influencing the supply response. We develop a stylized oligopoly model that accounts for compliance costs (fixed and variable) and investigate alternative policy options to explore different mechanisms an importing county may use to enhance the quality of its imports. The model explicitly recognizes the coexistence of complying and noncomplying firms, which is a situation often found in low-income countries where a small modern export-oriented segment invests in meeting foreign quality standards. We use the adjustment of the Polish meat sector to the tight EU food quality standards as an empirical example. The simulations show that a subsidy scheme can promote compliance with standards and can contribute to an upgrade of the industry in the exporting country, but its marginal effectiveness is diminishing.     

FTA,Exchange rate pass‐through and export price behavior – Lessons from the Australian dairy sector

The growing number of bilateral and regional free trade agreements (FTAs) alongside exchange rate volatility has raised a question on whether these affect exporters’ pricing behaviors, hence competitiveness. This study contributes to this topic by examining Australian dairy export price behavior across eight major markets taking into account the extent of pass‐through of exchange rate and tariff as well as FTAs between Australia and its trading partners. Commodity‐level dairy trade data from 1996 to 2016 and the feasible generalized least squares methods are employed. The study finds incomplete pass‐through at the industry level. The dairy export prices decrease by 1.7% if Australian dollar depreciates by 10%, while 10% tariff reduction is associated with 0.7% export price cut. Results at the commodity level show different pricing behaviors across destination and commodity markets. Overall, apart from the tariff effects, there is minimal evidence of the impacts of FTAs on dairy export prices.     

Impacts of trade liberalization in Canada's supply managed dairy industry

Trade is an integral part of the Canadian economy. The main institutional drivers governing trade are bilateral and multilateral agreements outlining permissible trade distorting measures. Since its inception in 1972, Canada's supply management system has remained protected throughout trade negotiations. The system appears, by any economic measure, to be having an increasingly disproportional influence in recent trade negotiations. However, trade agreements serve not only to maximize social surplus, but also to maximize some measure of political welfare. Canada has recently negotiated three prominent trade agreements: the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) came into effect in the latter part of 2017; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect at the end of 2018; and the Canada-United States-Mexico Agreement (CUSMA) could come into effect in 2020. Collectively, these agreements have guaranteed increased market access for fresh and processed dairy products. We build a spatial partial equilibrium model of the Canadian dairy industry consisting of three regions and 10 commodities to assess the individual and cumulative effect of these trade agreements. We pay particular attention to the institutional drivers within today's dairy sector: milk protein isolates; component pricing, including Class 7; and differential demand growth. We find that the aggregate impacts are: (a) a 1.4% decrease in the marginal retail price; (b) a 4.8% decrease in the blended producer price; and (c) an overall increase in social welfare of 7.8%. Worth noting, the decrease in producer surplus varies from 0.7% in the western region to 1.5% in Ontario. Our results may be relevant to future negotiations as well as the publicly promised compensation package for dairy producers.     

Harmonization of food trade standards and regulations in ASEAN: the case of Malaysia's food imports

Regulatory heterogeneity continues to be identified as a challenge for food trade in the Association of Southeast Asian Nations (ASEAN) as the progress of harmonization of food standards among member states remains slow. Using a new and comprehensive database on nontariff measures (NTMs), this article examines the coverage, frequency, and diversity of NTMs for the food sector in Malaysia, and then estimates their impact on food imports from ASEAN. The food sector in Malaysia is found to be highly regulated, dominated by technical measures, namely, labeling for sanitary and phytosanitary and technical barriers to trade reasons, product quality, and restricted substances. The empirical results subsequently verify that, overall, technical measures are import restrictive. This article therefore contends that harmonization of food standards and regulations at the regional level is important for enhancing trade. However, building common ground for food safety regulations should be NTM‐ and sector‐specific, to realize progress in terms of regulatory convergence. This is particularly true for the food sector, since complete harmonization is not practical and not politically feasible.     

Lessons about Effluent Trading from a Single Trade

Despite many years of existence, programs that allow transferable discharge permits to control water pollution have had quite limited success. This paper discusses a single trade that recently took place in the Lake Dillon drainage basin between point and nonpoint pollution sources. This trade demonstrates many of the challenges that are faced in effluent trading but also highlights the potential efficiency gains that can be achieved through such programs.     

Evaluating Input Standards for Non‐Point Pollution Control under Firm Heterogeneity

The efficacy and cost of input standards for reducing nitrate pollution from New Zealand dairy production are evaluated. In contrast to previous studies, firm heterogeneity is explicitly considered through the novel integration of efficient techniques for the calibration and decomposition of large optimisation models. Nitrogen fertiliser application should not be targeted by policy given its minor role in determining emissions. In contrast, livestock intensity is an appropriate base for regulation given its strong correlation with pollutant load. Abatement cost increases as stocking rate declines, but this can be offset at low levels of regulation through utilising slack feed resources to improve per‐cow milk production. Both uniform and differentiated input standards based on livestock intensity achieve substantial decreases in pollutant load at moderate cost. However, because of disparity in the slopes of abatement cost curves across firms, a differentiated policy is more cost‐effective at the levels of regulation required to achieve key societal goals for improved water quality.     

Modelling New Zealand dairy products: evidence on export survival and duration

This article presents evidence concerning the pattern of New Zealand dairy exports duration and survival from 1989 to 2017. It also analyses the influence of a set of supply, demand and gravity‐type drivers on the hazard rate for New Zealand dairy export relationships. The findings are summarised as follows. First, New Zealand dairy export relationships are dynamic with numerous entries and exits to and from foreign markets. Around half of the relationships survived for only 1–2 years at the sequence level. Second, duration of sequence, left‐censoring, initial export, decomposed sequences, New Zealand export price index, the number of cows available for dairy production, the number of origins and destinations, and destination partner’s GDP are the most significant factors reducing the hazard rate of export relationships. As regards the effects of the non‐tariff measures, it is interesting that technical barriers of trade are found to significantly decrease the hazard rate. Only pre‐shipment inspection and contingent trade protective measures are significant impediments to New Zealand dairy export relationships. Finally, hazard probabilities for New Zealand dairy export relationships are estimated to be ‘L‐shaped’ over time, whether or not non‐tariff measures are applied to New Zealand dairy products.     

Food safety issues and fresh food product exports from LDCs

Fresh food products have a high income elasticity of demand and few traditional trade barriers in high income markets. As such, they represent an important opportunity for less developed country (LDC) exporters. Fresh food product exports account for half of all food and agricultural exports from LDCs to high income countries. But these products may be subject to greater food safety risks and potential trade barriers arising from sanitary regulation. This paper reviews the challenges and issues facing LDCs in meeting food safety standards for export. These issues include: (a) the importance of fresh food product trade by region and the kinds of issues that arise from those products; (b) the role of farm to table approaches and hazard analysis critical control points (HACCP) in ensuring safety; (c) the role of the public sector in LDCs in facilitating trade; (d) the potential role of the SPS Agreement in resolving disputes and determining equivalency of standards between high and low income countries.     

Third‐party effects of water trading and potential policy responses*

A key feature of water policy reform in Australia has been the separation of water access entitlements from land titles and the establishment of markets for water. However, the separation of water entitlements from land failed to account for a number of characteristics that were implicit in the joint right. This has given rise to a number of third party effects as water is traded in an incomplete market. This paper describes four third‐party effects of water trade; reliability of supply, timeliness of delivery, storage and delivery charges, and water quality and examines policy responses to address these effects. The discussion draws on the concepts of exclusiveness and rivalry to determine the applicability of property rights and other solutions to the third‐party effects of trade. It is likely that many of the third‐party effects of trade discussed in this paper do not warrant policy intervention at the national or state level, but intervention at the local level may be warranted. The costs of addressing some third‐party effects may outweigh the benefits. Where there are significant gains from trade, the existence of these third‐party effects should not been seen as a reason to impede trade.     

我国特色果蔬国际贸易中存在的技术壁垒问题探析

我国是农业大国,农产品的国际贸易对我国经济发展具有较大的影响。随着我国农产品贸易出口量的增加,国外许多国家,尤其是发达国家开始制定许多措施来限制我国农产品的出口,其中技术壁垒对我国农产品出口产生很大的阻碍。为了更好地促进农产品贸易发展,我国逐渐将特色果蔬作为农产品贸易的主要竞争力,特色果蔬不仅具有较高的经济效益,其区域特色、品质特色及丰富的营养结构等优势更是顺应了消费者对农产品质量要求越来越高的新变化。文章通过阐述特色农产品与技术壁垒等的相关概念,进而分析我国特色果蔬国际贸易发展存在的相关问题,从不利与有利因素来研究技术壁垒对我国特色果蔬国际贸易带来的影响,以此为我国特色果蔬贸易的发展提出以下几点政策建议:(1)提高特色果蔬产品质量安全水平;(2)完善特色果蔬质量标准体系建设;(3)实现特色果蔬集约化生产与运输。     

基于钻石模型的奶粉国际竞争力分析

随着经济社会发展,近年来我国乳品加工业取得较快发展,其中奶粉生产、消费均呈现出更快增长态势。但是,在奶粉贸易市场上,我国进口奶粉却逐渐扩大,出口奶粉处于低位。针对奶粉净进口量呈扩大趋势的热点问题,运用奶粉国际市场占率、贸易竞争指数及竞争优势指数进行测算,结果发现中国奶粉与新西兰、欧盟等世界主要奶业强国在国际竞争上存在较大的差距,且近年来竞争力有继续下降的趋势。新西兰在奶粉竞争力处于一家独大的优势,无论是国际市场占有率、贸易竞争指数及显示性竞争优势指数,均处于领先地位。法国、德国、澳大利亚等国在国际上还保有一定的竞争地位,但由于市场份额被新西兰等国挤占,近年来有逐步下滑态势。面对这一严峻形势,运用波特的钻石竞争理论,从资源因素、需求条件、辅助产业、企业战略及政策带来的机遇、挑战等方面进行比较,对中国奶粉不具有国际竞争力进行原因分析。总的来看,中国奶粉需求增长潜力大,但限于资源紧缺,奶源生产增长压力大,国外奶粉生产国生产成本明显低于国内,奶粉面临国际市场的竞争力较大。最后,提出挖掘奶源生产潜力,根据区域不同资源禀赋,找出适合的养殖模式,充分利用资源,提高生产效率;要重新建立消费信心,通过奶业品牌的建立与质量安全监管,增强消费信心;还要充分利用好"两个市场与两种资源",鼓励奶粉加工企业走出去引进来,从交流合作中提升自身竞争力;同时,要尊重市场规律,把握贸易政策调控等力度;最终实现提高我国奶粉的国际竞争力目的,让中国人的奶瓶子掌握在中国人自己手里。     

THE FUTURE OF EEC DAIRY EXPORTS TO THE LESS-DEVELOPED COUNTRIES: AGRICULTURAL ECONOMICS OF LONG-RANGE PROJECTIONS AND MODEL STUDIES

From recent projection studies it can be concluded that future dairy exports by the EEC to the Less Developed Countries (LDCs) will increase. The self-sufficiency ratio for dairy products in the EEC will increase because of strong, technologically induced, growth of production potential. On the one hand, surplus production in the EEC will be difficult to curtail as the unfavourable conditions of the general economy will impede outmigration of inputs. Import demand, on the other hand, is projected to increase as many populations will be moving into stages of higher growth of income. Thus, input restrictions of agriculture in industrialised countries may be unnecessary. In this paper some agricultural economic aspects of the implied trade relationships are discussed. It is concluded that LDCs are not likely to benefit from gains of trade as predicted by theory of free trade and international specialisation. From projections by model studies, however, no consensus emerged. Projection and model studies seem hardly suited to provide insight in the effects of international trade under conditions of imperfect competition.     

AN EXAMINATION OF THE TAX SUBSIDIES TO THE DAIRY SECTORS IN CANADA,GERMANY NEW ZEALAND AND THE UNITED STATES

Subsidies to agricultural producers through domestic tax and social programme policies are generally not included in producer subsidy equivalent (PSE) measures. This study examines the price induced distortions of domestic tax policy and social programmes on dairy trade between Canada, New Zealand, Germany, and the United States. The degree of tax subsidisation and the price subsidies needed to offset the tax and social programme advantages enjoyed by each country are estimated using a simulation model. Study findings suggest that current German taxation policy provides a substantial subsidy to dairy producers. Canadian and US farmers also have some trade advantages because of tax policy and social programmes.     

Determining Implicit Prices for Hay Quality and Bale Characteristics

Markets for dairy quality hay have emerged as dairy farms purchase more feed off the farm. Previous research on hay markets used proxies for quality since objective measures of quality were unavailable. A hedonic pricing model incorporating direct measures of quality (moisture, crude protein, and relative feed value (RFV)), proxies (cutting), and bale-type variables was estimated using data from a hay auction. Large round and square bales and medium round bales were discounted relative to small square bales. The implicit price for RFV was $0.55/ton in 2001–02.     

The Heterogeneous Effects of Standards on Agricultural Trade Flows

This article uses a theory‐based translog gravity model to investigate the heterogeneous effects of food standards on aggregate agricultural trade. We revisit the ‘standards‐as‐barriers‐to‐trade’ debate with a distinctive twist. In contrast to existing works, we show that standards reduce trade but even more so for countries that trade smaller volumes. Our identification strategy exploits the within‐country variation in specific trade concerns. We confirm that stricter importer standards are indeed trade‐restrictive. However, the estimated trade cost elasticity varies depending on how intensively two countries trade. Specifically, it decreases in magnitude with an increasing import share of the exporter in the importing country's total imports. The reason is simple but intuitive; bigger trading partners find it more profitable to invest in meeting the costs of importer‐specific standards. This work is novel in showing that the standards–trade debate misses out on an important heterogeneity driven by existing import shares. Liberalising non‐tariff measures will favour smaller trading partners more than well‐established ones.