Tuesday, November 15, 2011

ACRE Dangers and the WTO

Via Michael Rogers at Green, Green, and Grains, here's an AEI study of the ACRE program, outlining two dangers:
  1. the likelihood a complaint against the program at the WTO would succeed, resulting in penalties like the Brazilian cotton case
  2. the possibility that market prices will decline in future years, leading to a large increase in payments.
I'm no expert on anything but for theWTO the writers speculate on a new WTO agreement which lowers the amber box limit below its current 19.1 billion and might be impacted by ACRE payments.  More likely is a "price suppression" suit in a period of declining market prices, along the lines of the Brazilian

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