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Economic Analysis of Base Acre and Payment Yield Designations Under the 2002 U.S. Farm Act

Author

Listed:
  • Young, C. Edwin
  • Skully, David W.
  • Westcott, Paul C.
  • Hoffman, Linwood A.

Abstract

The 2002 Farm Act provided farmland owners the opportunity to update commodity program base acres and payment yields used for calculating selected program benefits. Findings in this report suggest that farmland owners responded to economic incentives in these decisions, selecting those options for designating base acres that resulted in the greatest expected flow of program payments. Decisions of farmland owners in South Dakota, in upland cotton area, and in the Heartland region support the payment-maximization argument. In general, landowners favored maximizing payments over aligning base acres to current or recent plantings. Farmland owners with high-payment base acres, such as rice and cotton, held on to these base acres and, whenever possible, expanded them. Analogously, landowners with low-payment commodity base acres, such as oats and barley, switched to higher payment commodities whenever possible.

Suggested Citation

  • Young, C. Edwin & Skully, David W. & Westcott, Paul C. & Hoffman, Linwood A., 2005. "Economic Analysis of Base Acre and Payment Yield Designations Under the 2002 U.S. Farm Act," Economic Research Report 33594, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:33594
    DOI: 10.22004/ag.econ.33594
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    References listed on IDEAS

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    1. Westcott, Paul C. & Price, J. Michael, 2001. "Analysis Of The U.S. Commodity Loan Program With Marketing Loan Provisions," Agricultural Economic Reports 34035, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Keith H. Coble & J. Corey Miller & M. Darren Hudson, 2008. "Decoupled Farm Payments and Expectations for Base Updating," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 27-42.
    2. Jacobson, Sarah, 2014. "Temporal spillovers in land conservation," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 366-379.
    3. Woolverton, Andrea E. & Edwin, Young, 2009. "Factors Influencing ACRE Program Enrollment," Economic Research Report 55954, United States Department of Agriculture, Economic Research Service.
    4. White, T. Kirk & Hoppe, Robert A., 2012. "Changing Farm Structure and the Distribution of Farm Payments and Federal Crop Insurance," Economic Information Bulletin 120309, United States Department of Agriculture, Economic Research Service.
    5. O'Donoghue, Erik J. & Whitaker, James B., 2006. "How distorting are direct payments?," 2006 Annual meeting, July 23-26, Long Beach, CA 21247, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Ghormley, Alexis N. & Outlaw, Joe L. & Fischer, Bart L. & Anderson, David P., 2023. "An Evaluation of Alternatives for Updating Base Acres in the 2023 Farm Bill," 2023 Annual Meeting, July 23-25, Washington D.C. 335929, Agricultural and Applied Economics Association.

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