Alternative Alberta Barley Trade Scenarios with the Northwest United States

Abstract

A retrospective revised net revenue, partial equilibrium, linear programming model is developed for feedgrain trade between Alberta and eleven north west states of the United States. The model is run under six different policy scenarios over a five years period, 1984 to 1988. Alberta is divided into three regions (north, central and south), while the eleven states are divided into two regions (U.S. north and south). Feedgrain requirements and production are calculated for each region using grain consiming animal units and barley equivalents. Each region is able to both import and export feedgrain. As well as the five regions, two export points (Vancouver, British Columbia and Portland, Oregon) are defined. These poitns can import unlimited vlumes of grain but are not permitted to export to any of the regions. A baseline version of the model is developed, which incorporates Alberta producer payments for rail transportation as set out in the Western Grain Transportation Act, border costs as they existed during the time of the study, and estimates of Trucking rates. The baseline scenario is compared to five other scenarios which reflect the following policy changes: i) a closed Canada- U.S. border; ii) Alberta producers paying the full published cost of rail transportation; iii) the removal of all priced border costs; iv) Alberta producers paying the full rail rate, the removal of priced border costs; and v) producers paying the full rail rate, the removal of priced border costs, as well as trucking rates set equal on a per tonne per mile basis to full cost rail rates