A Simulation Model of the U.S. Export Enhancement Program for Wheat

Abstract

Abstract Nash bargaining game models representing negotiations of Export Enhancement Program (EEP) sales are combined with a quarterly spatial price equilibrium model representing non‐EEP world wheat trade to simulate the EEP's impact in late 1985 and early 1986. The benefits of the EEP in terms of increased U.S. export revenues adjusted for subsidy costs are estimated to be less than one percent of total U.S. revenues. For the first quarter of 1986, model simulations also show a lowering of the CCC loan rate to have a much greater potential for increasing U.S. wheat exports than the EEP as operated.