A SPATIAI, AND TEMPORAL MODEL OF THE NORTH AMERICAN PORK SECTOR FOR THE EVALUATION OF POLICY ALTERNATIVES

A quarterly recursive quadratic programming model of the North American pork sector is constructed toexplain spatial nd temporal variations in the sector and to evaluate the repercussions of policy changes. The model incor-porates econometric supply, demand for eonsumption and demand for storage equations for Eastern and Western Cariada and the United States. It is then run over a forty-one quarter period to evaluate its ability to simulate the sector. A policy experiment is conducted which assesses a change in tariff policies be-tween Canada nd the United States to illustrate the model's application for policy analysis. Key words: pork, supply response, demand response, quadratic programming, policy analysis. Several important issues face Canada's livestock sector at the present time. Among these are possible changes in trade arrangements resulting from G.A.T.T. negotiations, imminent changes in domestic transportation and marketing poli-cies for feedgrain and livestock products, and the decision of the federal government o en-hance the strength of agricultural stabilization programs. No empirical framework has been available in Canada which would allow an evalu-ation of such policy changes on the general level of prices, regional production, and trade. A model of the North American pork sector which can be used to evaluate alternative poli-cies in the Canadian subsector is presented in this paper. The model is based on static spatial equilibrium theory but includes dynamic ele-ments through the incorporation of lagged en-dogenous variables in supply and storage demand functions. First, spatial and temporal characteristics of slaughter supply, wholesale demand, an