The impact of the US Export Enhancement Program on the world wheat market

Brooks, H.G.; Devadoss, S.; Meyers, W.H.

CARD Working Paper ( 89-WP 46): vii + 44pp.

1989


Accession: 001977112

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Abstract
The US Export Enhancement Program (EEP) was built into the 1985 US Food Security Act with a major objective being to increase sales of US agricultural commodities. Through the EEP, the US government subsidizes exports of agricultural commodities to targeted countries. The EEP was applied to the majority of US wheat sales in 1987/88 and 1988/89. Coincident with the 1985 Act and EEP legislation, US wheat exports have increased significantly. The study uses a non-spatial, partial equilibrium model of world wheat trade to analyse the impact of the EEP on US wheat exports and share of world wheat trade. The study indicates that the effect of the EEP on the wheat market over the period 1986/87 to 1988/89 has been a large displacement of commercial wheat sales (87%-92%), with additional exports due to the EEP being only 8%-13%. The impact of the EEP on other exporters' wheat trade and importer demand has been small relative to the magnitude of total EEP sales.