The major grain producing nations are moving toward the reduction of domestic and export subsidies to agriculture. The grain importing nations are reducing import barriers. As world markets evolve, grain will tend to be produced in areas that have a comparative advantage in grain production. Over time, production will shift to least-cost areas. Moving toward market orientation during the 1980's, the United States sharply modified its grain policy so that nonrecourse loans are no longer used as price enhancement devices. The loan rates are established at a percentage below the moving average price and now provide a safety net for prices when aggregate output is much larger than normal in relation to demand. This change tends to remove the United States from its long-term role as residual supplier to the world markets. U.S. grains are more likely to be priced competitively, and stocks are unlikely to accumulate in government storage.
Preface -- About the Contributors -- 1 International Stocks Management in Unregulated Markets, / Robert D. Reinsel -- 2 Cereal Stocks and Production Variability in a Liberalized World Trade Environment, / Alexander H. Sarris -- 3 Implications of Grain Trade Liberalization for LDC Food Security, / Peter Hazell -- 4 Australia's Experience with Its Wool Buffer Stock Scheme, / H. Don B. H. Gunasekera and Brian S. Fisher -- 5 Canadian Experience with, and Reliance on, Income Security and Stabilization Measures, / D. McClatchy, B. Gilmour, J. Gellner, and B. Huff -- 6 Stabilizing Imported Food Prices for Small Developing Countries: Any Role for Commodity Futures?. / Takamas Akiyama and Pravin K. Trivedi -- 7 Government Grain Storage: Food Security and Price Stability, / Robert D. Reinsel.