Michigan: A State at the Intersection of the Debate over Full Planting Flexibility
AbstractGreater flexibility in U.S. farm programs with elimination of the restriction on the planting of fruit and vegetable crops (FAVR crops) is likely to be a major issue in congressional 2007 farm policy discussions. Michigan is a state with a wide range of both FAVR and program crops planted under the current policy. To capture the diversity of situations that would apply among of crops covered by the current policy, this research has examined a broad set of Michigan FAVR crops (dry beans, pickling cucumbers, processing tomatoes, fresh market tomatoes, squash, and blueberries). We evaluate both those factors that are likely to prevent the entry of DCP crop producers into the production of FAVR crops (barriers to entry or disincentives) and those factors that are likely to encourage DCP crop producers to enter the production of FAVR crops (inducements to entry or incentives). The balance will determine the likely outcome from elimination of the FAVR. With the exception of dry beans, a change in the FAVR would provide only small (or no) positive incentives for DCP crop producers to enter the production of FAVR crops. Similarly, barriers to entry would, in many cases, be high enough to significantly limit, or even prohibit, movement of DCP crop producers into the markets for FAVR crops. When considering these factors in combination, only dry beans appear to have the potential for entry of a significant number of new producers. In most other cases, the probability of entry by new producers appears to be low. Even with a low or zero response in total supply, equity issues will likely still arise.
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Bibliographic InfoPaper provided by Michigan State University, Department of Agricultural, Food, and Resource Economics in its series Agricultural Economic Report Series with number 10925.
Date of creation: 2007
Date of revision:
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- Falatoonzadeh, Hamid & Conner, J. Richard & Pope, Rulon D., 1985. "Risk Management Strategies To Reduce Net Income Variability For Farmers," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(01), July.
- Teague, Paul W. & Lee, John G., 1988. "Risk Efficient Perennial Crop Selection: A Motad Approach To Citrus Production," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 20(02), December.
- Thornsbury, Suzanne, 2008. "Impacts of FAVR Restriction Elimination on the Dry Bean Industry in the Upper Midwest," Agricultural Economic Report Series 44218, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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