U.S. Farm Policy and the Variability of Commodity Prices and Farm Revenues
AbstractHistorically, the U.S. government has had a substantial involvement in the agricultural sector. Lence and Hayes use a dynamic, three-commodity, rational-expectations storage model to compare the impact of the Federal Agricultural Improvement and Reform (FAIR) Act of 1996 with a free-market policy and with the agricultural policies that preceded the FAIR Act. They show that the transitional payments created to replace the pre-FAIR deficiency payments are much lower than the payments they replaced, which does reduce farm revenues. An important finding of the study is that the main economic impacts of the pre-FAIR scenario, relative to the free-market regime, were to transfer income to farmers and to substitute government storage for private storage in a way that did little to distort prices or to stabilize farm incomes.
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Bibliographic InfoPaper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 00-wp239.
Date of creation: Mar 2000
Date of revision:
Other versions of this item:
- Sergio H. Lence & Dermot J. Hayes, 2002. "U.S. Farm Policy and the Volatility of Commodity Prices and Farm Revenues," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 335-351.
- Lence, Sergio H. & Hayes, Dermot J., 2002. "U.S. Farm Policy and the Volatility of Commodity Prices and Farm Revenue," Staff General Research Papers 1779, Iowa State University, Department of Economics.
- Lence, Sergio H. & Hayes, Dermot J., 2000. "U.S. Farm Policy And The Variability Of Commodity Prices And Farm Revenues," 2000 Conference, April 17-18 2000, Chicago, Illinois 18937, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
- Sergio H. Lence & Dermot J. Hayes, 2000. "U.S. Farm Policy and the Variability of Commodity Prices and Farm Revenues," Food and Agricultural Policy Research Institute (FAPRI) Publications 00-wp239, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
- Lence, Sergio H. & Hayes, Dermot J., 2000. "U.S. Farm Policy and the Variability of Commodity Prices and Farm Revenues," Staff General Research Papers 1968, Iowa State University, Department of Economics.
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