The Devil’s in the Details:Why a Revenue-based Farm Program is No Panacea
AbstractProducer and other interest groups are beginning to consider farm policy positions in anticipation of hearings and possible serious farm bill debates during late 2006 and 2007. An idea gaining attention and support among some groups is deemphasizing or eliminating the current commodity “price” programs (loan deficiency payments and counter-cyclical payments) and replacing them with programs based on “revenue insurance” designs. Suggested designs include a multi-tiered farm payment program based on individual revenue guarantees and shortfalls in county revenue. Another example of such an alternative design is a whole-farm revenue design that issues program payments when adjusted gross farm revenue falls below a historical five-year baseline. Interestingly, programs quite similar to both proposals have been offered by USDA’s Risk Management Agency (RMA) since 1999 as part of the federal crop insurance program. In this paper, we evaluate the implications of using revenue-based designs as the primary U.S. farm support program. Our analysis considers implementation issues, distributional effects of such a change, and implications for compliance with WTO rules.
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Bibliographic InfoPaper provided by Mississippi State University, Department of Agricultural Economics in its series Working Papers with number 9602.
Date of creation: Jan 2006
Date of revision: Jul 2006
farm policy; revenue insurance; WTO.;
Other versions of this item:
- Coble, Keith H., 2006. "The Devil's in the Details: Why a Revenue-based Farm Program is No Panacea," Staff Reports 15806, Mississippi State University, Department of Agricultural Economics.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2006-05-06 (Agricultural Economics)
- NEP-ALL-2006-05-06 (All new papers)
- NEP-IAS-2006-05-06 (Insurance Economics)
- NEP-MAC-2006-05-06 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bruce A. Babcock & Chad E. Hart, 2005. "How Much "Safety" Is Available under the U.S. Proposal to the WTO?," Center for Agricultural and Rural Development (CARD) Publications 05-bp48, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Feng, Siyi & Patton, Myles & Binfield, Julian & Davis, John, 2014. "Assessing the costs of risk management tools: A crop insurance scenario based on a stochastic partial equilibrium model approach," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 170538, Agricultural Economics Society.
- Coble, Keith H. & Thomas, Sarah E. & Miller, J. Corey, 2007. "The Effect of Changing Government Subsidy Programs: An Analysis of Revenue at the Farm level," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34931, Southern Agricultural Economics Association.
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