Despite the massive changes in the food and agriculture sector, one sees again a continuing characteristic of the classic farm problems-a persistent disequilibrium in the form of an excess production in the face of ruinous prices. The major difference between the current crisis and that of the 1980s is that farmers are carrying lower levels of debt today and fewer are as highly leveraged as they were in the 1980s. Since the carryover of stocks into 1999 will be even greater than into 1998 and recovery in export demand cannot be expected soon, the price and income problems and their consequences are likely to continue into the near future. response in a congressional election year has been large increases in emergency farm income support. farm exports pushed farm prices to near depression levels. In the United States, a large carryover, especially of food and feed grains, combined with near-record grain and soybean production in 1998, had already depressed farm prices. exports and driven the value of the dollar in trade with these countries to far higher levels, further cutting U.S. This and the resulting internal inflation has cut effective demand for U.S. The exchange value of a number of currencies fell and was often followed by devaluation and government control of foreign exchange. Economic disorder in Asia, Eastern Europe, and Russia has rolled through international capital and commodity markets. In the late 1990s, the United States appears to be entering another major farm crisis. The long-term prospects for increased food exports depend on world economic growth and on the continued expansion of trade, especially as it involves in the low-income developing nations of the world. agricultural exports at least through the end of the decade. The current financial problems in developing countries are likely to slow the growth of U.S. exports in late 19 (Council of Economic Advisers, 1998:397 Economic Research Service, 1998a). Agricultural exports reached $60 billion in 1996, but the financial difficulties of Asian, African, and Eastern European countries reduced demand for U.S. Typically the United States exports the production from about half of its wheat acreage, one-third of its rice, soybean, and cotton acreage, and one-fifth of its acreage of feeds grains. In the mid-1990s, exports accounted for about 30 percent of U.S. agricultural sector is even more dependent on trade. The prosperity and growth of most nations now depends on the expansion of trade to an unprecedented degree. This a direct consequence of the growth of open national economies and the globalization of financial and commodity markets. World trade has been expanding faster than world economic output since 1973 (Council of Economic Advisers, 1997:243–244). Since then, major economic problems and consequent devaluations of currencies in Asia, Russia, and elsewhere have led to a stronger dollar, with the expected depressing effect on U.S. The real value of the dollar, which had been declining since 1985, stabilized and from 1992 to 1996 fluctuated around the same level (Council of Economic Advisers, 1998:247–248, 330, 408). The mid-1990s have been a period of continued economic growth following the brief recession in 1991–1993 in which growth slowed and unemployment grew.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |