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Agricultural Policy Reform and Its Impact on Farm Households Income Inequality

Author

Listed:
  • Ashok Mishra

    (Louisiana State University AgCenter)

  • Hisham El-Osta

    (U.S Department of Agriculture)

  • Saleem Shaik

    (North Dakota State University)

Abstract

In the United States the 1996 agricultural policy reform ushered in market-oriented farm policies and also gave farmers a seven-year lump-sum payment that was not tied to production. Some scholars argue that farm program payments have changed the distribution of income among farm households. Our study uses a national farmlevel survey for 1996-2001 to investigate a) the distribution of income among farm households, b) the sources that contribute to income inequality, and c) the role of farm program payments in equalizing income. Results show a high but declining income inequality between 1996 and 2001. Among the income components that contributed the most to income inequality was an income component labeled Income from farming and all other sources. Findings further show that marginal increases in both off-farm labor income and farm program payments reduce income inequality. The impact of various income components on overall reduction in income inequality therefore depends on a household’s participation in off-farm work and government farm programs.

Suggested Citation

  • Ashok Mishra & Hisham El-Osta & Saleem Shaik, 2010. "Agricultural Policy Reform and Its Impact on Farm Households Income Inequality," Journal of Income Distribution, Ad libros publications inc., vol. 19(1), pages 75-95, March.
    • Handle: RePEc:jid:journl:y:2010:v:19:i:1:p:75-95
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    File URL: http://pi.library.yorku.ca/ojs/index.php/jid/article/viewFile/16182/23749
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    Cited by:

    1. Garrone, Maria & Emmers, Dorien & Olper, Alessandro & Swinnen, Johan, 2019. "Jobs and agricultural policy: Impact of the common agricultural policy on EU agricultural employment," Food Policy, Elsevier, vol. 87(C), pages 1-1.

    More about this item

    Keywords

    Income inequality; adjusted Gini coefficient; farm households; government payment; off-farm income; Agricultural Resource Management Survey; Lorenz curves; Gini income elasticity;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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