Measuring the Effectiveness of the Export Enhancement Program for Poultry

This report examines the economic effects of the Export Enhancement Program (EEP) for poultry meat for 1987. Total exports have increased 79,000 metric tons due to the program. These numbers imply that every metric ton of poultry meat subsidized has resulted in an additional 0.83 metric ton of poultry meat exports at an average cost of $761 per metric ton. Considering that the average unit export value for all U.S. poultry exports was $1,038, the program has expanded poultry exports at relatively high cost. Although U.S. poultry exports have increased, other poultry exporters (including the EC) have not been significantly affected. U.S. producers have gained marginally, while U.S. consumers have lost an equivalent amount of welfare through higher domestic poultry prices. The primary beneficiaries have been consumers in the countries targeted for the EEP, primarily Iraq and Egypt. Additional analysis indicates that U.S. poultry production and exports probably would be somewhat higher if there were no EC policies affecting the world poultry and corn markets. Even with these policies in place, however, a slightly lower world price for poultry meat caused by these policies benefits U.S. consumers as much as it hurts U.S. producers. From the perspective of poultry markets, the effect of these EC policies on the United States is very small.