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Assessing participation in the Milk Income Loss Contract program and its impact on milk production

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  • D’Antoni, Jeremy M.
  • Mishra, Ashok K.
  • Blayney, Donald

Abstract

The Milk Income Loss Contract (MILC) program, a counter-cyclical income support program, was designed to provide price support to dairy farmers. Since the inception of the MILC program, large dairy producers have expressed concerns that the MILC payments have negatively affected their farming income. They argue that the program is not only inefficient but rewards inefficiency by keeping small, high-cost dairy farms in business. Using farm-level ARMS data from 2005, this study investigated the factors that affect farmers’ decisions to participate in the MILC program and if participation in MILC has an impact on milk production. The results show that participation in the MILC program is positively correlated with farmers’ educational attainment, organic certification subsidy, milk price, off-farm work by spouses, and financial record keeping. Further, medium-sized dairy farms are more likely to participate in MILC program. Finally, results indicate that participation in MILC program has a positive impact on milk production.

Suggested Citation

  • D’Antoni, Jeremy M. & Mishra, Ashok K. & Blayney, Donald, 2013. "Assessing participation in the Milk Income Loss Contract program and its impact on milk production," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 243-254.
    • Handle: RePEc:eee:jpolmo:v:35:y:2013:i:2:p:243-254
    DOI: 10.1016/j.jpolmod.2012.04.004
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    Cited by:

    1. Zhang, Jun & Yen, Steven T., 2017. "Supplemental Nutrition Assistance Program and food insecurity among families with children," Journal of Policy Modeling, Elsevier, vol. 39(1), pages 52-64.
    2. Lee, Yu Na & Chau, Nancy & Just, David R., 2019. "Producer group participation in the trade adjustment assistance program for farmers before and after the American Recovery and Reinvestment Act of 2009," Food Policy, Elsevier, vol. 86(C), pages 1-1.
    3. Colin Busby & Daniel Schwanen, 2013. "Putting the Market Back in Dairy Marketing," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 374, March.
    4. Moturi, Walter & Obare, Gideon & Kahi, Alexander, 2015. "Milk Marketing Channel Choices for Enhanced Competitiveness in The Kenya Dairy Supply Chain: A multinomial Logit Approach," 2015 Conference, August 9-14, 2015, Milan, Italy 212477, International Association of Agricultural Economists.
    5. Newton, John & Thraen, Cameron S. & Bozic, Marin, 2013. "Whither Dairy Policy? Evaluating Expected Government Outlays and Distributional Impacts of Alternative 2013 Farm Bill Dairy Title Proposals," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 153750, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Dairy farms; Agricultural policy; Milk Income Loss Contract Program; Two-step probit estimation;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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