Impact of the U.S. Export Enhancement Program on the World Wheat Market,The

H. G. Brooks, S. Devadoss, William H. Meyers
December 1989  [89-WP 46]

The U.S. Export Enhancement Program (EEP) was built into the 1985 U.S. Food Security Act with a major objective being to increase sales of U.S. agricultural commodities. Through the EEP, the U.S. government subsidizes exports of agricultural commodities to targeted countries. The EEP was applied to the majority of U.S. wheat sales n 1987/88 and 1988/89. Coincident with the 1985 act and EEP legislation, U.S. wheat exports have increased significantly.

This study uses a nonspatial, partial equilibrium model of world wheat trade to analyze the impact of the EEP on U.S. wheat exports and share of world wheat trade. The study indicates that the effect of the EEP on the wheat market over the period 1986/87 to 1988/89 has been a large displacement of commercial wheat sales (87-92%), with export additionally due to the EEP being only 8-13%. The impact of the EEP on other exporters' wheat trade and importer demand has been small relative to the magnitude of total EEP sales.

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