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An Analysis Of U.S. Farm Income Policies: Historical, Marketing-Determined, And Sector-Wide Stabilization

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  • McDowell, Howard
  • Kramer, Randall A.
  • Price, J. Michael

Abstract

This paper provides an economic analysis of the historical agricultural price and income support policy, a policy of market-determined prices and income, and a policy linking market-determined prices with sector-wide farm income stabilization in years of economic disaster. The analysis compares commodity prices, net farm income, and government expenditures over the period 1970 through 1982 based on estimates generated by USDA's Food and Agricultural Policy Simulator (FAPSIM). The historical policy generates the highest income and most stable prices. Market-determined income is lowest and has the greatest variability. Stabilization minimized income variability at intermediate income levels.

Suggested Citation

  • McDowell, Howard & Kramer, Randall A. & Price, J. Michael, 1989. "An Analysis Of U.S. Farm Income Policies: Historical, Marketing-Determined, And Sector-Wide Stabilization," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(2), pages 1-11, December.
    • Handle: RePEc:ags:sojoae:30105
    DOI: 10.22004/ag.econ.30105
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    References listed on IDEAS

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    1. John Spriggs, 1985. "Economic Analysis of the Western Grain Stabilization Program," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 33(2), pages 209-229, July.
    2. Orden, David, 1986. "Agriculture, trade, and macroeconomics: The U.S. case," Journal of Policy Modeling, Elsevier, vol. 8(1), pages 27-51.
    3. Emanuel Melichar, 1984. "A financial perspective on agriculture," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jan, pages 1-13.
    4. Dunham, Denis, 1985. "Food Cost Review, 1984," Agricultural Economic Reports 305719, United States Department of Agriculture, Economic Research Service.
    5. Rudolph K. Froker, 1945. "A Price Policy for Agriculture, Consistent With Economic Progress, That Will Promote Adequate and More Stable Income from Farming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(4), pages 844-851.
    6. Salathe, Larry E. & Price, J. Michael & Gadson, Kenneth E., 1982. "The Food and Agricultural Policy Simulator," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 34(02), pages 1-15, April.
    7. Ippolito, Richard A & Masson, Robert T, 1978. "The Social Cost of Government Regulation of Milk," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 33-65, April.
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    Cited by:

    1. Carey, Kathleen, 1992. "The U.S. Wheat And Corn Programs: Some Domestic Welfare And International Trade Implications," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(01), pages 1-8, July.
    2. Johansson, Robert C. & Kaplan, Jonathan D., 2003. "Manure Stew - U.S. Ingredients: Carrots, Sticks, and Water," 2003 Annual meeting, July 27-30, Montreal, Canada 21900, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Kovačević, Vlado & Jeločnik, Marko, 2019. "Development of risk management instruments in the EU," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 309063, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    4. Cooper, Joseph C. & Peters, Mark & Claassen, Roger, 2003. "Effects Of Agri-Environmental Payment Policies On Agricultural Trade," 2003 Annual meeting, July 27-30, Montreal, Canada 22240, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Kovačević, Vlado & Jeločnik, Marko, 2019. "Development of risk management instruments in the EU," Rural Areas and Development, European Rural Development Network (ERDN), vol. 16.

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