Empirically Analyzing the Impacts of U.S. Export Credit Programs on U.S. Agricultural Export Competitiveness

terms of affecting import demands and/or export supplies of agricultural goods. There
are many studies which have developed several approaches to calculate the subsidy
values of export credit programs. The present value approach was developed and applied
in several studies such as Baricello and Vercarmen (1994), Baron (1983), Hyberg et al.
(1995), Raymand (1992), Skully (1992), and Wilson and Yang (1996). A cost-benefit
analysis was conducted by Fleig and Hill (1984). These studies calculated subsidy values
that are associated with government-supported export credits such as subsidized interest
rates and provided long period repayments. They have considered them as a cost savings
to an importer, which could be interpreted as a price discount on imports. Empirically,
the OECD (2000) applied the present value approach to calculate the subsidy values of
export credit programs for agricultural goods as a series of price discounts, in terms of
their impact on the import demand side. They concluded that the subsidized elements of
officially supported export credits of fifteen member countries of the OEDC are small.

Alternatively, Diersen (1995) applies the present value approach to calculate the
subsidy values of export credit programs and empirically treats it as an additionality. His
theoretical approach is based on the two-period intertemporal consumption decision and
relies on the assumption that officially supported export credits increases loan supply
which in turn relaxes budget constraint of importing countries. Paarlberg (1997) and
Rude (2005) also apply the two-period intertemporal consumption decision framework.
This approach seems to capture the interest term of officially supported export credits.
As described above an officially supported export credit can be offered in multiple
combinations of various terms and conditions. Moreover, the general result of the two-
period intertemporal consumption decision framework implies that, consumption will

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