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THE DYNAMIC EFFECTS OF AGRICULTURAL SUBSIDIES IN THE UNITED STATES AgEcon
de Gorter, Harry; Fisher, Eric O'N..
This article analyzes the dynamics effects of the farm subsidies in the United States. The subsidies a farmer receives are based upon historical plantings, also called based acreage. It is sometimes optimal for a farmer temporarily not to participate in a program in order to increase future subsidies. The farmer’'s optimal policy is the solution to a deterministic dynamic program. Farmers with low base acreage opt out of these programs, whereas those with high base acreage participate in them. The article examines aggregate data involving corn, cotton, rice, and wheat during 1987. It shows that these programs increase the output of each of these crops and represent an annual deadweight loss of more than $2 billion.
Tipo: Journal Article Palavras-chave: Agricultural and Food Policy.
Ano: 1993 URL: http://purl.umn.edu/30961
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THE DYNAMIC EFFECTS OF AGRICULTURAL SUBSIDY PROGRAMS IN THE UNITED STATES AgEcon
de Gorter, Harry; Fisher, Eric O'N..
This paper analyzes the dynamic effects of the acreage restrictions and land diversion requirements that are characteristic of the farm subsidy programs in the United States. The subsidy payments a farmer receives are based upon historical base acreage, and it 1s sometimes optimal for a farmer not to participate in a pr9gr~m in order to increase base acreage in anticipation of higher future subsidies. This paper determines the farmer's optimal policy as the solution to a deterministic dynamic program. It shows that farmers with low base acreage typically opt out of these programs, whereas those with high base acreage participate in them. The paper concludes with an examination of aggregate data from the programs involving barley, corn, cotton, oats, rice,...
Tipo: Working or Discussion Paper Palavras-chave: Crop Production/Industries; Land Economics/Use.
Ano: 1989 URL: http://purl.umn.edu/6875
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