Robert Romain

Farm-Level Consequences of Canadian and U.S. Dairy Policies

apprehensive about the future. From a U.S. perspective, the 1996 farm bill mandated a process of dairy policy reform that could lead to essentially free market conditions, something not seen in the U.S. dairy industry since the 1920s. Canadian farmers await the implementation of provisions that would allow limited movement of quotas across provincial lines. Unknown are the impacts of the next round of trade negotiations conducted under the auspices of the new World Trade Organization (WTO). Dairy farmers and policy makers on both sides of the border need to know where they stand in terms of competitiveness to evaluate the impacts of policy change, whether they be intracountry or intercountry. Studies of the impacts of dairy policy reform have not been consistently illuminating in terms of impacts of major policy change on the competitive relationships between Canadian and U.S. dairy farmers. As a general principle, U.S. economists have found a 25%-30% cost advantage in favor of U.S. dairy farms (Baker et al., Nicholson and Knoblaugh). Canadian economists conclude that their farms would be cost com-

International Trade with Price Supports and Environmental Constraints: The Canadian Hog Industry

The national resource endowments specific to individual countries have long been thought of as one of the sources of comparative advantage in trade. As production processes have had more serious ecological impacts, and as wealthier consumers have demanded improved environmental quality, the ability of a country’s ecological system to absorb pollutants has become more important as a source of comparative advantage. This phenomenon is especially important for agriculture and agricultural trade. For instance, groundwater nitrification has become a very important issue in dense livestock production areas of the European Union (E.U.) and North America. The environmental costs and abatement costs associated with livestock manure have become a significant economic factor in these regions.