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Commodity Policy, Price Incentives, And The Growth In Per-Acre Yields

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  • Foster, William E.
  • Babcock, Bruce A.

Abstract

We estimate the influence of policy-induced price changes and of technology supply on North Carolina flue-cured tobacco yields. The decline in land rent and effective output price that accompanied a 1965 policy change from acreage allotments to poundage quotas caused a 12 percent decrease in yields. Farmer yields were more responsive to yield-increasing technologies under acreage allotments than under poundage quotas. Annual yield growth was 0.5 percent under poundage quotas and 4.32 percent under acreage allotments. The growth rate decline is attributable to changes in relative prices and to a slowdown in the supply of available technologies.

Suggested Citation

  • Foster, William E. & Babcock, Bruce A., 1993. "Commodity Policy, Price Incentives, And The Growth In Per-Acre Yields," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 0(Number 1), pages 1-13, July.
  • Handle: RePEc:ags:joaaec:15194
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    References listed on IDEAS

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    1. Abebayehu Tegene & Wallace E. Huffman & John A. Miranowski, 1988. "Dynamic Corn Supply Functions: A Model with Explicit Optimization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(1), pages 103-111.
    2. Hoover, Dale M., 1967. "LEASE AND TRANSFER OF FLUE-CURED TOBACCO MARKETING QUOTA AMONG FARMS For the 1966 and 1967 Crop Year: A Preliminary Report," Department of Economics and Business - Archive 259526, North Carolina State University, Department of Economics.
    3. Love, H. Alan & Foster, William E., 1990. "Commodity Program Slippage Rates For Corn And Wheat," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 0(Number 2), pages 1-10, December.
    4. Dana L. Hoag & William E. Foster & Bruce A. Babcock, 1993. "Field-Level Measurement of Land Productivity and Program Slippage," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 181-189.
    5. Bruce A. Babcock & William E. Foster, 1992. "Economic Rents Under Supply Controls with Marketable Quota," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 630-637.
    6. Rausser, Gordon C. & Zilberman, David & Just, Richard E., 1984. "The Distributional Effects Of Land Controls In Agriculture," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 0(Number 2), pages 1-18, December.
    7. Kim, Tae-Kyun & Hayes, Dermot J. & Hallam, Arne, 1992. "Technology adoption under price uncertainty," Journal of Development Economics, Elsevier, vol. 38(1), pages 245-253, January.
    8. Beck, Anthony C., 1974. "The Social Cost On Production Control In The Australian Egg Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 0(Number 04), pages 1-17, December.
    9. V. Eldon Ball, 1988. "Modeling Supply Response in a Multiproduct Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(4), pages 813-825.
    10. Tracy Miller & George Tolley, 1989. "Technology Adoption and Agricultural Price Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(4), pages 847-857.
    11. James A. Seagraves, 1969. "Capitalized Values of Tobacco Allotments and the Rate of Return to Allotment Owners," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(2), pages 320-334.
    12. David R. Lee & Peter G. Helmberger, 1985. "Estimating Supply Response in the Presence of Farm Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(2), pages 193-203.
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    Cited by:

    1. Borges, Robert B., 1995. "Trade And The Political Economy Of Agricultural Policy: The Case Of The United States Peanut Program," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 0(Number 2), pages 1-18, December.
    2. Keeney, Roman & Hertel, Thomas W., 2008. "Yield Response To Prices: Implications For Policy Modeling," Working papers 45969, Purdue University, Department of Agricultural Economics.
    3. Nalley, Lawton Lanier & Barkley, Andrew & Chumley, Forrest, 2008. "The Impact of the Kansas Wheat Breeding Program on Wheat Yields, 1911-2006," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(03), pages 913-925, December.
    4. Roman Keeney & Thomas W. Hertel, 2008. "U.S. Market Potential For Dried Distillers Grain With Solubles," Working Papers 08-13, Purdue University, College of Agriculture, Department of Agricultural Economics.

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