The 2002 US Farm Bill: what's in it for CAP reform?

The 2002 U.S. Farm Bill (the Farm Security and Rural Investment Act or FSRIA) provides considerably more government subsidies for U.S. agriculture than Congress envisaged when it passed the preceding 1996–2002 FAIR Act. We review the FAIR record, showing how government subsidies increased greatly beyond those originally scheduled. For FSRIA, we outline key commodity, trade, and conservation and environmental provisions. We expect that the commodity programmes will: (a) encourage production when the market calls for less; (b) significantly increase subsidies over FAIR baseline subsidies; (c) press against current WTO and possible Doha Round support limits; and (d) aggravate trading partners. Finally, we suggest two lessons from the U.S. policy experience that might benefit those working on CAP and WTO reform. First, past research shows that farm programmes have little to do with the economic health of rural communities. Second, programme transparency, and especially public disclosure of the level of payments going to individual farmers, by name, influences the farm policy debate. Personalized data show what economists have long maintained—that the bulk of programme benefits go to a relatively few, large, producers—but do so in a way that captures the public and policy-makers' attention

Costs to farmers of a tuberculosis breakdown

An on-farm survey of 151 cattle farmers who had experienced a bovine tuberculosis (Mycobacterium bovis) breakdown on their farms was undertaken in 2003 to assess the costs associated with the breakdown. In 90 per cent of cases the cost was estimated to be less than 18,513 pound for dairy herds and less than El 1,462 for beef herds, but with a range from 229 pound to 103,817 pound. The main cost was the slaughter of reactor cattle. For the majority of the farmers, the compensation payments seemed to meet most of the costs of their breakdowns, although a majority was still left with net losses.

The CAP and EU enlargement: Prospects for an alternative strategy to avoid the lock-in of CAP support

The integration of the central and east European countries (CEECs) into the Common Agricultural Policy (CAP) could become a major problem. At the Copenhagen European summit in December 2002, the EU agreed a transitional period with a gradual phasing in of direct payments. However, this strategy will not solve the problems of the CAP: budgetary limits remain problematic, the policy ignores possible developments in the World Trade Organization (WTO), and the extension of direct payments to the CEECs will further capitalize, and hence lock-in, agricultural support. The latter makes future reform even more difficult and, to overcome these problems, we suggest an alternative strategy to integrate the CEECs into the CAP. The EU should phase out direct payments by applying a bond scheme. Finally, we consider whether this option is politically viable.

The visibility of agricultural subsidies and market illusions in the Common Agricultural Policy: Some evidence from farmers' views in Germany, Portugal and the United Kingdom

This article demonstrates that the design and nature of agricultural support schemes has an influence on farmers' perception of their level of dependence on agricultural support. While direct aid payments inform farmers about the extent to which they are subsidised, indirect support mechanisms veil the level of subsidisation, and therefore they are not fully aware of the extent to which they are supported. To test this hypothesis, we applied data from a survey of 4,500 farmers in three countries: the United Kingdom, Germany and Portugal. It is demonstrated that indirect support, such as that provided through artificially high consumer prices, gives an illusion of free and competitive markets among farmers. This 'visibility' hypothesis is evaluated against an alternative hypothesis that assumes farmers have complete, or at least a fairly comprehensive level of, information on agricultural support schemes. Our findings show that this alternative hypothesis can be ruled out.

Assessing the impact of the 'Decoupling' reform of the common agricultural policy on Irish farmers' off-farm labour market participation decisions

This paper assesses the impact of the 'decoupling' reform of the Common Agricultural Policy on the labour allocation decisions of Irish farmers. The agricultural household decision-making model provides the conceptual and theoretical framework to examine the interaction between government subsidies and farmers' time allocation decisions. The relationship postulated is that 'decoupling' of agricultural support from production would probably result in a decline in the return to farm labour but it would also lead to an increase in household wealth. The effect of these factors on how farmers allocate their time is tested empirically using labour participation and labour supply models. The models developed are sufficiently general for application elsewhere. The main findings for the Irish situation are that the decoupling of direct payments is likely to increase the probability of farmers participating in the off-farm employment market and that the amount of time allocated to off-farm work will increase.

'Fair trade gold': Antecedents, prospects and challenges

This paper critically examines the challenges with, and impacts of, adopting the models in place for fair trade agriculture in the artisanal gold mining sector. Over the past two years, an NGO-led 'fair trade gold' movement has surfaced, its crystallization fuelled by a burgeoning body of evidence that points to impoverished artisanal miners in developing countries receiving low payments for their gold, as well as working in hazardous and unsanitary conditions. Proponents of fair trade gold contest that increased interaction between artisanal miners and Western jewellers could facilitate the former receiving fairer prices for gold, accessing support services, and ultimately, improving their quality of life. In the case of sub-Saharan Africa, however, the gold being mined on an artisanal scale does not supply Western retailers as perhaps believed; it is rather an important source of foreign exchange, which host governments employ buyers to collect for their coffers. It is maintained here that if the underlying purpose of fair trade is to improve the livelihoods and well-being of subsistence producers in developing countries, then the models that have proved so successful in alleviating the hardships of agro-producers of 'tropical' commodities such as coffee, tea, bananas and cocoa, should be adapted to artisanal gold mining in sub-Saharan Africa. Campaigns promoting 'fair trade gold' in the region should view host governments, and not Western retailers, as the 'end consumer', and focus on improving governance at the grassroots, organizing informal operators into working cooperatives, and addressing complications with purchasing arrangements - all of which would go a long way toward improving the livelihoods of subsistence artisanal miners. A case study of Noyem, Ghana, the location of a sprawling illegal gold mining community, is presented, which magnifies these challenges further and provides perspective on how they can be overcome. (c) 2007 Elsevier Ltd. All rights reserved.

Potential WTO challenges to the CAP

Since the early 1990s the EU's CAP has undergone considerable change with, first, a switch from market price support to direct payments in 1992 and, second, a further decoupling of support with the creation of the single payment scheme in 2003. Nonetheless, whether the current Doha Round of WTO trade negotiations is successfully completed or not, the CAP will come under renewed scrutiny, as a result either of negotiated reductions in support or of litigation through the WTO's dispute settlement process. This article discusses CAP market price and income support in the context of these likely WTO constraints.

Decoupling EU farm support: Does the new single payment scheme fit within the green box?

Recent reform of the EU’s Common Agricultural Policy (CAP) has led to a further decoupling of farm support. The EU believes that the new Single Payment Scheme, which replaces the former system of area and headage payments to farmers, tied to production, will qualify for green-box status in the WTO. We examine this contention, particularly in light of the recent WTO panel report on upland cotton.

Risk under performance-based contracting in the UK construction sector

As a method of procuring the services of the built environment, performance-based contracting (PBC) seeks to link the building supplier to longer term commitments than has traditionally been the case in the construction sector. By rewarding the building producer according to the way that building or structure delivers the users' requirements, rather than according to a list of assembled parts, a number of additional risks are taken by contractors, including fitness for purpose, costs and briefing. The extent to which contractors recognize these risks and their methods of dealing with them vary considerably and are influenced by their attitudes towards risk. As the risks associated with PBC are seen as large, uninsurable, and vulnerable to changing client requirements, the majority of respondents would reject the use of PBC as a method of contracting. Nevertheless, PBC may be used under particular conditions, where rewards are deemed sufficient to compensate for the additional risk to the contractor of undertaking work on the basis of a stream of payments paid over the life of a structure depending on the satisfactory performance of the building or as part of a private finance initiative.

Economic models and algorithms for distributed systems

Distributed computing paradigms for sharing resources such as Clouds, Grids, Peer-to-Peer systems, or voluntary computing are becoming increasingly popular. While there are some success stories such as PlanetLab, OneLab, BOINC, BitTorrent, and SETI@home, a widespread use of these technologies for business applications has not yet been achieved. In a business environment, mechanisms are needed to provide incentives to potential users for participating in such networks. These mechanisms may range from simple non-monetary access rights, monetary payments to specific policies for sharing. Although a few models for a framework have been discussed (in the general area of a "Grid Economy"), none of these models has yet been realised in practice. This book attempts to fill this gap by discussing the reasons for such limited take-up and exploring incentive mechanisms for resource sharing in distributed systems. The purpose of this book is to identify research challenges in successfully using and deploying resource sharing strategies in open-source and commercial distributed systems.

European Union: Shadow WTO agricultural domestic support notifications

The notification of the level of domestic support to the World Trade Organization (WTO) is intended to reflect compliance with obligations entered into at the time of the Uruguay Round. WTO members have often been slow to provide notification of domestic support levels. This makes the process of notification less useful as an indicator of the degree to which changes in policy have or have not benefited the trade system as a whole and exporting countries in particular. The notification of domestic support in the E.U. illustrates the value of a measure that reflects current policies and can therefore act as a basis for negotiation of further disciplines where these are necessary. The E.U. has made major changes in its Common Agricultural Policy (CAP) over the period since 1992 when the MacSharry reforms were implemented. Payments originally notified in the blue box (related to supply control) have over time been changed until in their present form they are unrelated to current production or price levels, and hence can satisfy the criteria for the green box. The E.U. has therefore much more latitude in trade talks to agree to reductions in the allowable trade-distorting support. This paper reproduced the E.U. notifications relating to 2003/04 and extends these with official statistics to the year 2006/07. It then projects forward the components of domestic support until the year 2013/14, based on forecasts of future production and estimates of policy parameters. The impact of a successful Doha Round is simulated, showing that the constraints envisaged in the WTO draft modalities document of May 19, 2008, would be binding by the year 2013, at about the time the next budget cycle in the E.U. starts. Without the Doha Round constraints, further reform might still happen for domestic reasons, but the framework provided by the WTO for domestic policy spending would be less relevant. In that case, much could hinge on the legitimacy of the Single Farm Payment system under the current rules governing the green box.

Selection of funding schemes by a borrowing decision model: a Hong Kong case study

In financial decision-making, a number of mathematical models have been developed for financial management in construction. However, optimizing both qualitative and quantitative factors and the semi-structured nature of construction finance optimization problems are key challenges in solving construction finance decisions. The selection of funding schemes by a modified construction loan acquisition model is solved by an adaptive genetic algorithm (AGA) approach. The basic objectives of the model are to optimize the loan and to minimize the interest payments for all projects. Multiple projects being undertaken by a medium-size construction firm in Hong Kong were used as a real case study to demonstrate the application of the model to the borrowing decision problems. A compromise monthly borrowing schedule was finally achieved. The results indicate that Small and Medium Enterprise (SME) Loan Guarantee Scheme (SGS) was first identified as the source of external financing. Selection of sources of funding can then be made to avoid the possibility of financial problems in the firm by classifying qualitative factors into external, interactive and internal types and taking additional qualitative factors including sovereignty, credit ability and networking into consideration. Thus a more accurate, objective and reliable borrowing decision can be provided for the decision-maker to analyse the financial options.

Making the least active pay: a simulation of rewards and penalties under Demand Side Participation programs

The orthodox approach for incentivising Demand Side Participation (DSP) programs is that utility losses from capital, installation and planning costs should be recovered under financial incentive mechanisms which aim to ensure that utilities have the right incentives to implement DSP activities. The recent national smart metering roll-out in the UK implies that this approach needs to be reassessed since utilities will recover the capital costs associated with DSP technology through bills. This paper introduces a reward and penalty mechanism focusing on residential users. DSP planning costs are recovered through payments from those consumers who do not react to peak signals. Those consumers who do react are rewarded by paying lower bills. Because real-time incentives to residential consumers tend to fail due to the negligible amounts associated with net gains (and losses) or individual users, in the proposed mechanism the regulator determines benchmarks which are matched against responses to signals and caps the level of rewards/penalties to avoid market distortions. The paper presents an overview of existing financial incentive mechanisms for DSP; introduces the reward/penalty mechanism aimed at fostering DSP under the hypothesis of smart metering roll-out; considers the costs faced by utilities for DSP programs; assesses linear rate effects and value changes; introduces compensatory weights for those consumers who have physical or financial impediments; and shows findings based on simulation runs on three discrete levels of elasticity.

Using learning networks to understand complex systems: a case study of biological, geophysical and social research in the Amazon

Developing high-quality scientific research will be most effective if research communities with diverse skills and interests are able to share information and knowledge, are aware of the major challenges across disciplines, and can exploit economies of scale to provide robust answers and better inform policy. We evaluate opportunities and challenges facing the development of a more interactive research environment by developing an interdisciplinary synthesis of research on a single geographic region. We focus on the Amazon as it is of enormous regional and global environmental importance and faces a highly uncertain future. To take stock of existing knowledge and provide a framework for analysis we present a set of mini-reviews from fourteen different areas of research, encompassing taxonomy, biodiversity, biogeography, vegetation dynamics, landscape ecology, earth-atmosphere interactions, ecosystem processes, fire, deforestation dynamics, hydrology, hunting, conservation planning, livelihoods, and payments for ecosystem services. Each review highlights the current state of knowledge and identifies research priorities, including major challenges and opportunities. We show that while substantial progress is being made across many areas of scientific research, our understanding of specific issues is often dependent on knowledge from other disciplines. Accelerating the acquisition of reliable and contextualized knowledge about the fate of complex pristine and modified ecosystems is partly dependent on our ability to exploit economies of scale in shared resources and technical expertise, recognise and make explicit interconnections and feedbacks among sub-disciplines, increase the temporal and spatial scale of existing studies, and improve the dissemination of scientific findings to policy makers and society at large. Enhancing interaction among research efforts is vital if we are to make the most of limited funds and overcome the challenges posed by addressing large-scale interdisciplinary questions. Bringing together a diverse scientific community with a single geographic focus can help increase awareness of research questions both within and among disciplines, and reveal the opportunities that may exist for advancing acquisition of reliable knowledge. This approach could be useful for a variety of globally important scientific questions.

The audit of regional policy: 1934‐1939

This paper examines the cost-effectiveness of British regional policy during the 1930s. It takes issue with Correlli Barnett, who has argued that regional policy measures introduced from 1945 were already shown to be inefficient by the failure of similar assistance during the 1930s. The evolution of the main 1930s initiatives that influenced post-war policy is discussed and their effectiveness assessed. When account is taken of savings in government welfare payments these initiatives are shown to have been very cost-effective, producing an annual return to the exchequer of around 56%, or more.