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AbstractThe trade wars initiated by the Trump Administration in 2018 had an adverse effect on US agriculture. Countertariffs imposed by US trading partners had significant effects on US commodity exports, particularly soybeans, and lowered crop and livestock receipts. To shore up political support from farmers, the Trump administration authorized an estimated total of $28 billion to farmers and ranchers in compensation for export losses. While those payments will help the sector in the short term, the aid payments could well prolong problems for the sector beyond 2020 by exacerbating trade tensions and precipitating future WTO disputes.

Except for dairy producers, who have benefited from price and income support programs dating back to New Deal legislation from the 1930s, coverage for livestock and livestock products remained largely confined to ad hoc supplemental disaster coverage until 2000. In 2000, livestock producers became eligible for coverage on a pilot basis under the federal crop insurance program. Unlike crop insurance, which indemnifies producers based on production or revenue losses, livestock insurance protects producers against declines in futures prices for livestock products or against declines in futures price margins between output and input products (for example, feed costs). Until 2018, coverage under livestock insurance was minimal, partly because statutory caps on expenditures limited producer subsidies. In 2018, Congress lifted the cap on expenditures, and premium subsidies were increased for livestock products. As a result, livestock insurance has grown dramatically over the past three years, with total liabilities in 2021 at $14 billion, up about 2,800 percent from just $512 million in 2018. Despite this expansion, these liabilities are still only about 10 percent of the $136 billion in total liability for all crop policies in 2021.1 Nevertheless, the recent rapid growth in participation in the federal livestock program raises concerns that the cost to taxpayers of insuring livestock may far exceed what the Congressional Budget Office (CBO) forecasted when the expenditure cap was removed from the program. Perhaps more worrying is that this program provides subsidized price support to producers who already have access to private futures and options markets that offer risk management protection against price declines. With subsidies, producers have little incentive to manage risk through private markets. Programs that guarantee minimum prices for producers are not new to agriculture, but when they are coupled to production, they can distort production and marketing decisions and harm foreign suppliers. US livestock product exports have grown significantly in recent years, and such support potentially exposes US exports to challenges by foreign suppliers through the dispute settlement mechanism at the World Trade Organization. ; Non-PR ; IFPRI5; 3 Building Inclusive and Efficient Markets, Trade Systems, and Food Industry ; MTID

Key Points Following four years of contentious trade wars and unilateral trade actions against key US partners under the previous administration, the Joe Biden administration must decide whether to continue those policies or change course to work multilaterally to achieve its goals. Thus far, trade policy under the new administration looks a lot like it did with the previous one. US farmers and ranchers have genuinely benefited from the multilateral trading system, but, as the past four years have shown, they are also vulnerable when the system is not working as intended. The next four years will present an opportunity for the United States to again lead in global trade policy. The recent agreement to remove tariffs on EU steel and aluminum exports is a good start. ; Non-PR ; IFPRI5; CRP2; 3 Building Inclusive and Efficient Markets, Trade Systems, and Food Industry ; MTID; PIM ; CGIAR Research Program on Policies, Institutions, and Markets (PIM)

US agricultural producers have been hard hit by the actions of Canada, China, Mexico, and other countries that have imposed tariffs against US agricultural products in retaliation for adverse trade actions from the Trump administration against the countries' exports to the United States. To shore up political support from an important constituency, the Trump administration has authorized an estimated total of $28 billion in 2018 and 2019 to farmers and ranchers in compensation packages for their losses in those years. ; IFPRI5; 3 Building Inclusive and Efficient Markets, Trade Systems, and Food Industry ; MTID ; Non-PR

The challenges to meeting the growing global food demand—population and income growth and supply uncertainties complicated by climate change, environmental pressures, and water scarcity—all point to the increasing importance of trade and the need for a more, not less, open trading system. Growth in agricultural trade has been facilitated in part through the rules-based system established under the World Trade Organization (WTO), particularly the Uruguay Round Agreement on Agriculture (AoA). The AoA was implemented in 1995 and brought substantial discipline to the areas of market access, domestic support, and export competition. However, progress since the Uruguay Round has been limited. While the Doha Development Agenda (DDA) was launched with much anticipation in 2001, members failed to reach agreement in July 2008 and the trade agenda in Geneva has since advanced slowly. Despite the best efforts of many, the negotiating intensity seen in late 2007 and 2008 has largely dissipated, in part due to the global recession and the inevitable changes in governments that sometime shift the focus of negotiations. Serious efforts were made to renew the negotiations, but in the end, members have had to be content with harvesting the low-hanging fruit, such as trade facilitation and export competition. Although there have been significant accomplishments, they represent but a small portion of what was on the table during the DDA negotiations. In addition, negotiated settlements on the tougher issues, such as market access and domestic support, have become more difficult to obtain in isolation. The recent experience at the WTO's Eleventh Ministerial Conference in Buenos Aires highlights the difficulties of reaching a negotiated settlement on domestic support in isolation from, say, market access. Given the increasing importance of trade in addressing food security needs and its critical role in efforts to eliminate malnutrition and hunger by 2030, achieving further progress in the liberalization of world trade is of paramount importance. ; Non-PR ; IFPRI1; 3 Building Inclusive and Efficient Markets, Trade Systems, and Food Industry ; MTID

Climate Smart Agriculture (CSA) has been promoted as a key approach in addressing the effects of climate change. First launched in 2009, CSA refers to agricultural technologies that are well suited to increase farmer livelihoods in the face of a changing climate by 1) raising agricultural productivity; 2) building resilience of livelihoods and farming systems; and 3) reducing carbon emissions. While government implementation of mitigation and adaptation policies may be an effective means to help address climate change, concerns arise, if CSA policies run counter to international trade disciplines. In particular, CSA policies could come into direct conflict with WTO trade rules, if these policies serve to insulate domestic producers from competition. Thus, they could potentially distort production and trade. This paper examines CSA policies in the context of the WTO agreements, including domestic support disciplines under the WTO Agreement on Agriculture. ; IFPRI5; 3 Building Inclusive and Efficient Markets, Trade Systems, and Food Industry; 1 Fostering Climate-Resilient and Sustainable Food Supply ; MTID ; Non-PR

Insurance programs have become an increasingly popular method for providing support to agricultural producers.1 Mahul and Stutley (2010) reported that in 2007 more than 100 countries had agricultural insurance programs available. In the United States multiple-peril crop insurance was available on a limited basis as early as the late 1930s; more recently, insurance has become the dominant safety-net program in the United States in terms of government outlays, overshadowing more traditional price and income support programs (Glauber 2012). Recent reforms in the European Community (EC) could potentially expand insurance programs there as well (European Commission 2013). ; PR ; IFPRI1; A Ensuring Sustainable food production; C Improving markets and trade; D Transforming Agriculture; CRP2 ; MTID; PIM ; CGIAR Research Program on Policies, Institutions, and Markets (PIM)

AbstractAgricultural insurance in developed countries originates in named peril products that were originally offered by private companies approximately two hundred years ago, first in Europe and then in the United States. Today, many agricultural insurance products are offered, most of them heavily subsidized by governments. In the context of developed economies, this article examines the evolution of agricultural insurance products, the economics of the demand and supply sides of agricultural insurance markets, and the economic welfare, political economy, and trade relation implications of private and public agricultural insurance in developed countries.

The 1996 Federal Agricultural Improvement and Reform (FAIR) Act of 1996 has been portrayed as a radical departure from the farm policies of the past 60 years. FAIR brought sweeping institutional changes to the basic price and income support programs, many of which had been in place since the 1930s. Close analysis reveals that many of the reforms of the FAIR Act are less revolutionary innovations and more continuations of reforms that began with the 1985 farm legislation and were extended by the 1990 farm bill. Nor should one believe that the changes will result, as some suggest, in large changes in crop acreages or have large effects on the year‐to‐year variability offarm revenues for these crops. In both cases, the changes in policies may be substantive, but their effective consequences are modest.