2. 1. Introduction: U. S. Embassy Agricultural
1. Introduction: U.S. Embassy Agricultural Office - Why Trade Is Important
2. Practical Macro Economics in My Job - Theory vs. Reality: Grapefruit
3. Student Topic Selection (GMOs, WTO, or U.S. Farm Policy)
4. Questions and Answers.

3. Total population about 46 million
Bosnia-Herzegovina
Vienna
Austria
Croatia
Czech Republic
Hungary
Slovakia
Slovenia
Total population about 46 million
Annual estimated imports of U.S. agricultural products: circa $600 million

4. Why Do U.S. Taxpayers Spend Money on Overseas Agricultural Offices?

5. $50 - $60 billion in annual U. S
$50 - $60 billion in annual U.S. agricultural exports account for 25%-30% of overall farm income
By helping to maximize export sales opportunities, USDA helps to stabilize prices and incomes and thereby contribute to a greater safety net for U.S. producers.

6. Foreign Demand is Critical to Many U.S. Agricultural Products
average volume
U.S. economy-wide = 12.4%
Average for all agriculture = 24.5%

7. Overseas Programs: marketing programs export credits food aid
market intelligence
trade policy & trade barrier advocacy

8. 2. Practical Macro Economics In My Job
- U.S. Market Access and the Hungarian Grapefruit TRQ

9. Theory - New Quota
Shifts Supply

10. Reality - Trade Growth
is More Important

11. The Reality -
Marketing is More Important
U.S. Grapefruit is ‘pink’ and sweeter
U.S. Grapefruit on the market earlier
Easy shipment from EU fruit brokers

12. 3. Student Topic Selection
Biotechnology
WTO
Background on U.S. Farm Sector
ANYTHING else.

13. “Recombinant DNA may rank as the safest revolutionary technology ever developed. To my knowledge, not one fatality, much less illness, has been caused by a genetically manipulated organism.”
James Watson as quoted in Time magazine, January 11, 1999

14. Percentage of Area Devoted to Biotech Crops in the U.S.61 54 25
2000 69 68 26
2001
1999 48
Cotton 47
Soybean 37
Corn
Biotech Share (%)
Crops

15. Environmental Impact of Agricultural Biotechnology
Healthier plants result in higher yields
Insect-protected crops reduce the need for insecticides
Biotechnology helps protect water.

16. Environmental Benefits from
Biotech Crops in the U.S.

17. U.S. Policy on Biotech Regulate the end products, not the process
Based on science
New GM varieties approved by up to three government Agencies.

18. USDA-APHIS: Regulates the development and field testing of genetically engineered products for safe agricultural use
EPA: Ensures that genetically engineered products classified as pesticides are used safely in the environment
FDA: Ensures that food products are safe and wholesome

19. U.S. Coordinated Framework for the Regulation of Biotechnology

20. Commercialised Crops:
Today - “Input Traits”
Commercialised Crops:
Novel herbicide tolerance
Insect resistance (Bt)
Virus resistance
Combinations of the above.

21. Tomorrow “Input” & “Output” Traits
Brassica napus (oilseed rape)
abiotic stress
production of special enzymes
pharmaceutical proteins (interleuken)
fungal resistance
Solanum tuberosum (potato)
fungal resistance (phytophthera)
bacterial resistance (erwinia etc.)
increased solids
altered starch

22. Our Questions About Labeling
Should other breeding practices also be labeled?
Does the label carry health related information?
Can the claims on the label be verified by testing?
What ‘opinions’ should the label convey?

23. A ‘bad’ label...

24. Summary ‘GMOs’ are eaten by 283 million Americans every day
U.S. consumers MUCH more comfortable than Europeans
U.S. - EU risk/benefit debate will influence developing world
Huge growth in use expected to continue - hundreds of new crops
Public education is the key.

25. Biotechnology
WTO
Background on U.S. Farm Sector
ANYTHING else.

26. Trade Policy U.S. Position on Next WTO Round
Export Subsidies
Domestic Support
Market Access
Special and Differential Treatment
Food Security

27. EU Uses Most Export Subsidies

28. U.S. Proposal for Domestic Support
Simplify support measures into two categories:
1. Exempt measures (not trade distorting)
2. Non-exempt measures (trade distorting)
Negotiate lower levels but maintain flexibility to support farmers.

29. Levels of Domestic Support
European Union
Japan
United States
Other countries

30. Market Access Continue to reduce tariffs
New rules for administering Tariff Rate Quotas
New rule for import state trading companies
Science based rules for regulating trade

31. Special Treatment for Developing Countries
More market access for products from developing countries
Special consideration for least- developed countries when they implement their tariff reductions
Exemptions on domestic support programs for food security reasons
More technical assistance

32. Food Security Maintain food aid Continue the use of export credits
Establish export reporting systems
Strengthen disciplines on export restrictions

33. Biotechnology
WTO
Background on U.S. Farm Sector
ANYTHING else.

34. Background on U.S. Farm Sector

35. A Very Brief History of U.S. Agricultural Policy
1820 U.S. Congress established ‘agricultural committees’ to deal with farm issues.
1862 Department of Agriculture Established (agronomy, statistics)
1890 Meat Inspection Act
‘New Deal’ legislation increased Govt. involvement in agriculture
- Price supports
- Some Production Quotas
- First large environmental programs (dust bowl)
1939 Food stamp program begins

36. A Very Brief History of U.S. Agricultural Policy Cont..
1970’s ‘Surplus Disposal’ through export subsidies and foreign food aid
1980’s 15 million hectares under conservation reserve program
More use of ‘non-production distorting’ government payments (FAIR Act)
Uruguay Round brings agricultural under international trade rules for the first time

37. 1994 Federal Agriculture Improvement and Reform (FAIR) Act
Increased market orientation
Ended supply management
Most restrictions on planting eliminated
Eliminated Target Prices and Deficiency Payments
Government costs fixed for seven years
Supplemented by Disaster Payments (!)

38. Disaster Assistance
Ad hoc disaster programs have played a large role in U.S. agricultural policy
1994 Crop Insurance Reform “presumably” eliminated ad hoc disaster assistance
Emergency assistance enacted in
1998 = $5.9 billion
1999 = $8.7 billion
2000 = about $11 billion
2001 = about $3.1 billion

39. Emergency Aid to Account for Largest Share Of Government Payments to Farm Sector in 2000

42. Commercial farms are small in number, own less than 1/3 of the land, but produce most of the output (1999)
Commercial farms
Intermediate farms
Rural residence

43. Share of Hogs Sold by Marketing Method

44. Growth in Yields Reflects Technological Progress

45. Summary Farms are becoming more integrated and bigger
Technology continues to be the base of agribusiness
Exports will remain very important
U.S. farm subsidy policy remains unclear (e.g., use of ‘ad hoc’ payments)
Environment and ‘societal’ concerns will play increasing role (but not as much as Europe).

46. Internet Sites for More Information on U.S. Farm Policy and Programs
The U.S. Embassy Vienna Agricultural Office
For general information on agricultural programs
For information on commodity programs
For information on conservation programs
For information on trade programs
For information on organics
Biosafety Library Home Page