The Effects of Domestic Offset Programs on the Cotton Market

This paper analyzed the effects of the U.S. domestic offset program on the world cotton markets using a partial equilibrium model following the assumption given by Brown et al. (2010). The results in our study are largely similar to those of Baker et al. and Brown et al., confirming that study’s findings that ACES, and its domestic offset program in particular, would cause increases in the domestic prices of several agricultural commodities. However, the overall effects of this increase in the world price on total world trade is tempered by increased exports from India, Brazil, Uzbekistan, Australia, and Western & Central African countries