Agriculture in crisis: Policy analysis and cow-calf producer behaviour in the aftermath of the Canadian BSE events

The bovine spongiform encephalopathy (BSE) crisis was a significant shock to the Canadian agricultural sector. On May 20, 2003, it was announced that an animal infected with BSE had been identified. The economic aftermath of this discovery was described as "horrendous" (AGO, 2004).;Three research chapters address questions related to cow-calf producer behaviour and government policy. Chapter 2 focuses on designing emergency aid programs and calculating short-run quantitative benchmarks for crisis relief at the farm-level. Chapter 3 estimates observed risk preferences for a sample of Albertan cow-calf producers. Differential risk preferences help to explain diverse production responses following agricultural crises. The final research chapter, chapter 4, examines Canada's primary risk management program when there is potential for catastrophic price risk. In particular, vertical and horizontal equity criteria are used to scrutinize the distribution of net AgriStability benefits across a heterogeneous sample of cow-calf producers.;Economic crises, such as the Canadian BSE agricultural crisis, are rare events. The rarity of these episodes supplies a unique opportunity for analysis. According to a policy review by the Alberta Auditor General (AGO, 2004), the agricultural economics discipline appeared to be of little assistance in the crisis policy design process. This research addresses this problem by exploring economic theory and policy via detailed empirical investigation. Specifically, this study evaluates agricultural support policies and producer risk preferences in the aftermath of the Canadian BSE crisis.