Government transfers to north american grain producers: Levels and implications

Abstract

The Uruguay round of GATT negotiations is working towards the reduction of agricultural subsidies. In addition, the United States and Canada have agreed to freer trade in grains if the respective subsidy levels become equalized in the two countries. This article quantifies the level of income transfers to United States and Canadian grain farmers over a 15 year period. It was found that government support to agriculture was no higher in the mid 1980s than it was in the early 1970s. Transfers have generally been lower for feed grains in the United States than they have been in Canada. The opposite is true for wheat. The equalization of annual subsidies will be difficult to bring about given the extreme differences which exist between the United States and Canadian farm programs.