Progress 10/01/00 to 09/30/05

Outputs
The major activity in this final year of the project was an analysis of the stability implications of US and EU agricultural policies over the past decade. The analysis clearly demonstrates that farm income stability is an important objective for both US and EU agricultural policies. Furthermore, the analysis shows that in both cases the policy sets used in the US and EU effectively achieve farm revenue stability. There are very important implications of this for trade negotiations. Economists generally advocate decoupled payments instead of coupled payments; that is, payments that are not linked in any way to what is produced or what is the market price. Both the US and the EU use direct payments that are decoupled as part of their policy set. But in both cases, other policies provide revenue stability through coupled payments or other protective measures. Without protective measures or coupled payments, there is no way to ensure revenue stability, so government stability objectives run exactly counter to the trade preference for decoupled payments.

Impacts
The major impact of this analysis is that developed and developing counry governments alike now have a better understanding of the conflict between reducing trade distortions and maintaining farm revenue stability. New approaches will have to be considered.

Publications

• Jacquet, Florence; Tyner, Wallace E.; and Gray, Allan W. La stabilisation du revenu des agriculteurs : un objectif central dans les politiques agricoles des Etats - Unis et de l'Union Europeenne. Economie Rurale 281 (May-June 2004), pp. 9-27.
• Tyner, Wallace E.; Jacquet, Florence; and Gray, Allan. Farm Income Stabilization: A Central Goal for American and European Policies. Paper presented at the 11th Congress of the European Association of Agricultural Economists, August 24-27, 2005, Copenhagen, Denmark.

Progress 10/01/03 to 09/29/04

Outputs
Free trade can lead to improved economic well-being for citizens in all countries engaging in the trade liberalization. In 2003/04, the U.S. and Morocco negotiated a free trade agreement (FTA) that has been approved by Congress and signed by the President. It takes effect January 1, 2005. I assisted in the analysis of the economic impacts on Moroccan agriculture of various alternatives that were considered during the negotiating process. It was important that the agreement result in something that both sides felt was a win-win. Since the agreement with Morocco was largely political, it was particularly important that there not be severe adverse impacts on Moroccan agriculture. In addition, research continued on the importance of stability as a prime objective of agricultural policy in both the developed and developing world.

Impacts
Even though the agreement is largely a political agreement, there are important economic benefits for both American and Moroccan agriculture. The Farm Bureau estimates that the agreement will result in a net increase in U.S. agricultural exports to Morocco of $235 million by 2015. The Farm Bureau also estimates that U.S. farm income will have increased about $75 million per year by 2015 and about $500 million over the first decade the agreement is in effect. In 2003, Indiana exports to Morocco totaled $5.5 million, making it 14th in the country in exports to Morocco. Indiana exports to Morocco grew 81 percent between 1999 and 2003, partly because of corn tariff reductions resulting from previous work done by Tyner and Arndt. Under the free trade agreement, soybeans will be duty free immediately, and corn will be duty free within five years. So we would expect to see Indiana exports grow substantially in the years to come.

Publications

• Ait El Mekki, Akka, and Tyner, Wallace E. The Moroccan-American FTA Effects on the Agricultural and Food Sectors in Morocco. Paper presented at the 7th Annual Conference on Global Economic Analysis, Trade, Poverty, and the Environment, June 17-19, 2004, Washington, D.C. http://www.gtap.agecon.purdue.edu/resources/res_display.asp/
• He, Lixia; Tyner, Wallace E.; and Siam, Gamal. Improving Irrigation Water Allocation Efficiency Using Alternative Policy Options in Egypt. Paper presented at the American Agricultural Economics Association meetings, August 1-4, 2004.
• Book review of Economics of Sustainable Energy in Agriculture, American Journal of Agricultural Economics Vol. 86, No. 3 (August 2004), pp. 859-60.
• Jacquet, Florence; Tyner, Wallace E.; and Gray, Allan W. La stabilisation du revenu des agriculteurs : un objectif central dans les politiques agricoles des Etats - Unis et de Union Europeenne. Economie Rurale 281 (May-June 2004), pp. 9-27.

Progress 10/01/02 to 09/30/03

Outputs
The bulk of the work this year consisted of working with the Government of Morocco on analysis of trade policy options as part of its negotiations with the United States of a free trade agreement (FTA). This FTA is a great example of the potential conflict between domestic and trade policies that is at the heart of this project. Morocco has for decades had a highly distorted agricultural sector. In moving towards a FTA, agriculture must become much more market oriented and much more open to the global economy, especially the United States. Yet major disruptions are possible in Moroccan agriculture with a FTA. So issues like transition and sequencing of liberalization became very important. Even though the Moroccan economy has little to gain in a comparative static sense from a FTA, there are potential dynamic gains from the economic reforms that will be necessary for implementation. There also are dynamic gains possible from American direct investment that might result from the agreement. Analysis of the impacts of the possible agreement is important both for Morocco and the U.S. An agreement that is not good for Morocco is not good for the U.S.

Impacts
As a result of the impact analysis conducted on a Morocco-US free trade agreement,it is likely that there will be a much better agreement reached. As a result, US exports to Morocco of agricultural commodities like corn and wheat will increase. Also, economic growth in Morocco would increase with minimal dislocations in agriculture.

Publications

• Arndt, Channing; and Tyner, Wallace E. Policy and Progress in Moroccan Agriculture: A Retrospective and Perspective. Chapter (pp. 231-56) in Food, Agriculture, and Economic Policy in the Middle East and North Africa, edited by Hans Lofgren. Elsevier, 2003, 337 pages.
• Tyner, Wallace E. Constraints and Opportunities for Regional Integration of Agribusiness and Related Industries in West Africa. Proceedings of the Private Sector Forum on West African Regional Integration, Accra, Ghana, October 23-24, 2002.
• Tyner, Wallace E. The American Farm Bill - What Consequences for American and World Agriculture (English translation). Paper presented at the French Academy of Agriculture, November 2002, and published in Compte Rendus de l'Academie d'Agriculture de France No. 8/2002, pp. 21-30.

Progress 10/01/01 to 09/30/02

Outputs
This year significant progress was made in aiding development agencies in strategic planning of agricultural and rural development activities. Tyner was principal author of the World Bank Middle East- North Africa Rural Development Strategy and also the rural development strategy for the USAID mission in Mali (see publication list). These strategies focus in a large way on improving policies conducive to increaing productivity and economic growth in rural areas. On agricultural policy analysis in developing countries, Tyner produced a synthesis report on liberalization of cereals markets in Morocco and the possibility of compensating farmers for their losses that would accompany liberalization. This report is now being considered by the Moroccan Ministry of Agriculture as it formulates its cereals policy reform program.

Impacts
Ultimately, the anticipated impact of this research program should be increased agricultural productivity, improvement in social and economic well-being of poor people in rural areas, and higher rates of economic growth in rural areas in developing countries.

Publications

• Tyner, W. (principal author). 2001. Middle East and North Africa: Reaching the Rural Poor - Rural Development Strategy. World Bank, August 2001, 88 pages.
• Tyner, W. (principal author). 2002. Mali Agricultural Sector Assessment. Agricultural Policy Development Project, Abt Associates, March 2002, 2 volumes.
• Tyner, W. (principal author). 2002. Cereals Reform Synthesis Report. Prepared for the World Bank and the Moroccan Ministry of Agriculture, July 2002.
• Arndt, C. and Tyner, W. E. 2002. "Policy and Progress in Moroccan Agriculture: A Retrospective and Perspective." Chapter in a book on North African and Middle-Eastern agricultural policy. IFPRI, 2002.

Progress 10/01/00 to 09/30/01

Outputs
There were two major activities and outputs this year: (1)Analysis of the linkages between agricultural policy and the climatic reality in Morocco. The agricultural policy set historically has encouraged crops that are not very drought resistant, but the climatic reality is drought at least half the time. Thus, there needs to be a realignment of agricultural incentives to the climate conditions that exist. A paper on this topic was presented at the opening plenary session of the national agricultural economics meetings in Morocco. (2)Strategic planning for rural development in North Africa and the Middle East. Tyner was the lead author on the World Bank's strategic plan for rural development for this region. Major objectives of rural development in the region are reducing poverty, reducing vulnerability of rural populations, and sustainable management of natural resources. Strategies were developed for accomplishing these objectives, and indicative action plans were created for each client country in the region and for regional cross-cutting themes.

Impacts
The impact of the research to better align agricultural policies to climatic reality is already being felt in policy formation and implementation in Morocco. There is significantly increased consideration of climate variability in policy analysis. New tools for policy analysis are being developed to directly incorporate risk analysis into policy decisions. A summary of the tools needed was included in the paper presented in Morocco this year. The immediate impact of the World Bank rural development strategy work has been to reach concensus among participants on the need for holistic approaches to rural development and for active community participation in designing and implementing development projects. Another impact has been that MENA countries have launched their own rural development strategy processes, many using the framework developed for this project. Longer term, as countries implement their strategies, we should see more success in agricultural development programs in the region.

Publications

• Tyner, Wallace (principal author) 2001. Middle East and North Africa: Reaching the Rural Poor - Rural Development Strategy. World Bank, August , 88 pages.
• Tyner, Wallace E. 2001. Agricultural Policy Analysis Needed to Ensure that the Economic Policy Set is Aligned with the Climatic Reality. Plenary paper presented at the Association Marocaine de l'Agro-Economie (and published in the proceedings), 24-25 May, Rabat, Morocco.

Progress 10/01/99 to 09/30/00

Outputs
1)In 1987 Morocco significantly increased protection of poultry feed ingredients, particularly maize. The almost immediate results of this increase in maize protection were reduced production and consumption of poultry meat and eggs. Our results indicated that if maize protection were lowered such that maize price fell 30%, the prices of meat and eggs would decrease 12 and 15 percent respectively, and consumption of meat and eggs would increase 6 and 13 percent respectively. Furthermore small farmers and urban dwellers would be made better off, and only large farmers would be made worse off. 2)Price stability in basic food grains like wheat is a very important concern of agricultural policy. If the European and American export subsidy programs are taken into consideration, world wheat prices have not been more stable in the past decade compared to previous decades - contrary to popular perception. The GATT round promised increased price stability, but it has not been achieved. Developing countries, particularly vulnerable to price instability, will need to seek an appropriate balance between opening to the world markets and maintaining domestic price stability. 3)Morocco has been in the process of liberalizing agricultural trade policy and domestic market regulation. Our analysis of the proposed reforms indicated that 1)the domestic deregulation is quite significant and should stimulate increased efficiencies throughout the domestic marketing chain; 2)the border protection changes do not lower protection, and the protection system is neither transparent nor effective in achieving stated Moroccan policy objectives; 3)domestic subsidies on low quality flour are not reaching the targeted poor, and should be eliminated; 4)protection of animal feed ingredients in not coherent and will lead to inefficiencies in the system; and 5)the Moroccan Ministry of Agriculture needs to install an effective monitoring system to follow the impacts of the reforms being implemented. Our 1998 paper laid out a reform plan for the oilseeds sector. That plan called for a type of deficiency paper for producers while lowering or eliminating border protection on oilseeds, oilseed meals, and table oil. In 2000, at this writing, this reform was in the process of being implemented.

Impacts
Morocco has lowered protection on corn as a result of the analysis done in 1996. Protection fell from around 60% in 1995 to 40% or less in 2000. Because of that reduction in protection, Morocco imports more maize today. In 2000, Morocco will be liberalizing the markets for oilseeds and oilseed products. That major reform will lead to much greater efficiency throughout the oilseed system. On the issue of the importance of price stability, it is now recognized much more by the World Bank and other international donors that price stability is a legitimate concern for developing countries. Price variability imposes a cost on developing countries, and that cost must be taken into consideration in choosing policy sets.

Publications

• Arndt, Channing; Serghini, Hassan; and Tyner, Wallace E. 1995. "Analysis of the Impacts of Reducing Maize Protection Levels on the Moroccan Poultry Sector." American Journal of Agricultural Economics 77, No. 5 (December 1995): 1378.
• Abbott, Phillip C.; Tyner, Wallace E.; and Cripe, Kelly. 1996. "The GATT Outcome and Price Stability: World Wheat Markets and Moroccan Import Policy." Proceedings of the IAAE/Moroccan International Conference in Rabat, Morocco, June 1996.
• Mdafri, Abdellah; Tyner, Wallace E.; and Preckel, Paul V. 1996. "Profitability of Crops and Livestock Production in the Settat Province of Morocco." Proceedings of the IAAE/Moroccan International Conference in Rabat, Morocco, June 1996.
• Abbott, Philip; Hertel, Thomas; Masters, William; Paarlberg, Philip; Sanders, John; and Tyner, Wally. 1997. "International Trade" in Food System 21: Gearing Up for the New Millennium. EC-710, November 1997.
• Tyner, Wallace E. 1997. "World Food Needs Toward 2020: Discussion." American Journal of Agricultural Economics 79 (1997): 1485-86.
• Tyner, Wallace E., and Arndt, Channing. 1998. "La Reforme Marocaine dan les Domaines des Cereales, du Sucre, et des Oleagineux." Proceedings of the national meetings of the Moroccan Association of Agricultural Economics, February 12-13, 1998, Rabat, Morocco.
• Arndt, Channing; Tyner, Wallace E.; Redani, Latifa; Arrach, Redoun; and Serghini, Hassan. 1999. "Liberalizing Oilseeds: The Time is Right." Actes du seminaire organise par l Association Marocaine de l Agro-economie, Rabat, Morocco, 6-7 May 1999, pp. 33-74.

Progress 10/01/98 to 09/30/99

Outputs
Much of the work this year focused on global economic and financial issues and on Egypt. The Egypt study examined the current structure, conduct, and performance of the different components of the wheat/flour sub-sector in Egypt. Included in that analysis was an examination of trade policy alternatives that could be considered by the government of Egypt. Because of the interest on global economic and financial issues, research also helped to identify and characterize the major drivers of potential future economic growth in the U.S. and abroad. Some of these include Asian economic recovery, Brazilian economic performance, Wall Street indices, consumer confidence, European Union growth and unemployment, and Federal Reserve actions.

Impacts
The Government of Egypt has already implemented at least one of the policy options evaluated in the May 1999 paper. They are mixing maize and wheat flour at the mill to help prevent fraud in the subsidized flour markets. In addition, further work has been requested on trade policy issues for the Seattle trade negotiation round.

Publications

• Tyner, Wallace, Morse, Adair, El Amir, M. Ragaa, Mostafa, Adel, and Sherif, Sherin. Wheat Subsector Baseline Study. Monitoring, Verification, and Evaluation Unit, Agricultural Policy Reform Program, Impact Assessment Report No. 6, Abt Associates, Cairo, Egypt, May 1999.

Progress 10/01/97 to 09/30/98

Outputs
Work continued on trade and domestic policy reform in Morocco. The paper published in the proceedings of the Moroccan Association of Agricultural Economics details a set of policy recommendations regarding reform of the wheat flour, oilseeds and products, and sugar subsectors. While some reforms have been implemented, much work is still needed in liberalizing domestic markets and finding a system of border protection that can transmit long term world market trends without subjecting Morocco to every change in direction evidenced on the Chicago Board of Trade. The search for such a set of policy instruments continues. The AJAE discussion piece focuses mainly on the need for improved understanding of price variability and its impacts on different segments of the population. Much of the work to date has been on expected average food availabilities, but we believe that variability will become much more important in the future that it has been in the recent past. Future research will focus on that topic.

Impacts
(N/A)

Publications

• Tyner, Wallace E. 1997. "World Food Needs Toward 2020: Discussion." American Journal of Agricultural Economics 79 (1997): 1485-86.
• Tyner, Wallace E., and Arndt, Channing. 1998. "La Reforme Marocaine dan les Domaines des Cereales, du Sucre, et des Oleagineux." Proceedings of the national meetings of the Moroccan Association of Agricultural Economics, February 12-13, 1998, Rabat, Morocco.

Progress 10/01/96 to 09/30/97

Outputs
Important results from our research this past year are as follows: 1. Morocco continued on its course of structural adjustment and sectoral reform. I worked with Moroccan government officials and the World Bank in the design and implementation of specific reform measures in border protection and domestic market liberalization. Morocco has adopted a system of border protection for "strategic commodities" that is a hybrid between a specific tariff and an ad valorem tariff. The objective is using this approach was to limit the amplification of variability in world market prices as they are transmitted to domestic markets. Ad valorem tariffs increase the variability of domestic prices whereas specific tariffs do not. While the system is implemented to function as a ad valorem tariff to keep Morocco in compliance with its GATT offer, it functions economically more as a specific tariff. 2. In November 1997 I participated in a joint World Bank Moroccan commission to draft a framework law for the Moroccan agricultural sector for the next decade. The draft law will have as one of its guiding principles a market orientation for the agricultural sector. Linkage of Morocco with international markets is another related guiding principle. This orientation is in marked contrast to historic Moroccan approaches to managing the agricultural sector. 3. Also in 1997, I prepared a study of methods that could be used to assess the effectiveness of the Agricultural Development Fund in Morocco. This fund is used to provide subsidies to certain investments such as irrigation equipment, tractors, selected seeds, etc. The paper (cited below) designs methods to do the analysis and identifies data sources that can be used for each analysis. 4. In addition to the above, we also completed a project called Food System 21: Gearing Up for the New Millennium. This project attempted to identify key drivers of change in the food system for the decade ahead.

Impacts
(N/A)

Publications

• Tyner, Wallace E. "Development of an Approach for Monitoring and Evaluation of the Impacts of the Agricultural Development Fund." A report to the World Bank and the Moroccan Ministry of Agriculture, June 1997, 31 pages.
• DeBoer, Larry; Taylor, Bob; and Tyner, Wally. "Macro Economy" in Food System 21--Gearing Up for the New Millennium, Purdue University Cooperative Extension Service (EC-710), November 1997, pp. 9-44.
• Abbott, Philip; Hertel, Thomas; Masters, William; Paarlberg, Philip; Sanders, John; and Tyner, Wally. "International Trade" in Food System 21--Gearing Up for the New Millennium, Purdue University Cooperative Extension Service (EC-710), November 1997, pp.45-80.

Progress 10/01/95 to 09/30/96

Outputs
Important results from our research this past year are as follows: 1)In 1987 Morocco significantly increased protection of poultry feed ingredients, particularly maize. The almost immediate results of this increase in maize protection were reduced production and consumption of poultry meat and eggs. Our results indicated that if maize protection were lowered such that maize price fell 30%, the prices of meat and eggs would decrease 12 and 15 percent respectively, and consumption of meat and eggs would increase 6 and 13 percent respectively. Furthermore small farmers and urban dwellers would be made better off, and only large farmers would be made worse off. 2)Price stability in basic food grains like wheat is a very important concern of agricultural policy. If the European and American export subsidy programs are taken into consideration, world wheat prices have not been more stable in the past decade compared to previous decades. The GATT round promised increased price stability, but it has not been achieved. Developing countries, particularly vulnerable to price instability, will need to seek an appropriate balance between opening to the world markets and maintaining domestic price stability. 3)Morocco has been in the process of liberalizing agricultural trade policy and domestic market regulation. Our analysis of the proposed reforms indicated that 1)the domestic deregulation is quite significant and should stimulate increased efficiencies throughout the domestic marketing chain; 2)the borde.

Impacts
(N/A)

Publications

• ARNDT, CHANNING; SERGHINI, HASSAN; and TYNER, WALLACE E. iAnalysis of the Impacts of Reducing Maize Protection Levels on the Moroccan Poultry Sector.A American Journal of Agricultural Economics 77, No. 5 (December 1995): 1378.
• ABBOTT, PHILLIP C.; TYNER, WALLACE E.; and CRIPE, KELLY. iThe GATT Outcome and Price Stability: World Wheat Markets and Moroccan Import Policy.A Paper presented at the IAAE/Moroccan International Conference in Rabat, Morocco, June 1996.
• MDAFRI, ABDELLAH; TYNER, WALLACE E.; and PRECKEL, PAUL V. iProfitability of Crops and Livestock Production in the Settat Province of Morocco.A Paper presented at the IAAE/Moroccan International Conference in Rabat, Morocco, June 1996.
• TYNER, WALLACE E., and ARNDT, CHANNING. iMoroccan Policy Reform in Cereals, Sugar, and Oilseeds.A Report prepared for the World Bank, July 1996.