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Effect of agricultural policy on regional income inequality among farm households

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  • Mishra, Ashok
  • El-Osta, Hisham
  • Gillespie, Jeffrey M.

Abstract

Policymakers are under constant pressure to alleviate financial stress, mainly associated with farm business income, on farm households through government farm program payments. The 1996 FAIR Act signaled the end of these payments and Congress decided that agricultural policy should be more market oriented. Using the Gini coefficient concept and a large farm-level dataset, this study investigates the impact of government payments on income inequality among farm households in nine farming resource regions of the U.S. Results indicate that distribution of income among farm households in the Fruitful Rim region was above the level of dispersion for all U.S. farm households; however, income inequality in the Heartland region was below the level of dispersion for all U.S. farm households. Finally, income from government farm programs helped reduce total income inequality in the Heartland and Northern Great Plains regions, while income from off-farm wages and/or salaries played an important role in reducing total income inequality in Basin and Range and Fruitful Rim regions of the U.S. farm sector.

Suggested Citation

  • Mishra, Ashok & El-Osta, Hisham & Gillespie, Jeffrey M., 2009. "Effect of agricultural policy on regional income inequality among farm households," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 325-340, May.
  • Handle: RePEc:eee:jpolmo:v:31:y:2009:i:3:p:325-340
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    References listed on IDEAS

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    Cited by:

    1. Severini, Simone & Tantari, Antonella, 2013. "The effect of the EU farm payments policy and its recent reform on farm income inequality," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 212-227.
    2. Rocamora-Montiel, Beatriz & Colombo, Sergio & Salazar-Ordóñez, Melania, 2014. "Social attitudes in southern Spain to shape EU agricultural policy," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 156-171.
    3. Sahrbacher, Amanda, 2012. "Impacts of CAP reforms on farm structures and performance disparities: An agent-based approach," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 65, number 65.
    4. Piet, Laurent, 2016. "Recent trends in the distribution of farm sizes in the EU," 149th Seminar, October 27-28, 2016, Rennes, France 245075, European Association of Agricultural Economists.
    5. S. Severini & A. Tantari, 2015. "Which factors affect the distribution of direct payments among farmers in the EU Member States?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(1), pages 25-48, February.
    6. El Benni, Nadja & Finger, Robert, 2013. "The effect of agricultural policy reforms on income inequality in Swiss agriculture - An analysis for valley, hill and mountain regions," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 638-651.
    7. Elisabetta Croci & Silvia Sorana, 2013. "Le variazioni nei redditi agricoli ai tempi della Grande recessione," AGRICOLTURA ISTITUZIONI MERCATI, FrancoAngeli Editore, vol. 2013(3), pages 13-32.
    8. Deppermann, Andre & Offermann, Frank & Grethe, Harald, 2016. "Redistributive effects of CAP liberalisation: From the sectoral level to the single farm," Journal of Policy Modeling, Elsevier, vol. 38(1), pages 26-43.
    9. Deppermann, Andre & Grethe, Harald & Offermann, Frank, 2011. "Distributional Effects of the CAP on Western German Farm Incomes and Regional Farm Income Disparity," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114442, European Association of Agricultural Economists.
    10. D’Antoni, Jeremy M. & Mishra, Ashok K. & Barkley, Andrew P., 2012. "Feast or flee: Government payments and labor migration from U.S. agriculture," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 181-192.
    11. Severini, Simone & Tantari, Antonella, 2014. "The contribution of different off-farm income sources and government payments to regional income inequality among farm households in Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 2, August.
    12. Robert Finger & Nadja El Benni, 2011. "Spatial Analysis of Income Inequality in Agriculture," Economics Bulletin, AccessEcon, vol. 31(3), pages 2138-2150.
    13. Hadrich, Joleen C. & Wolf, Christopher A. & Johnson, Kamina K., 2015. "Chacterizing U.S. Dairy Farm Wealth and Income Distributions," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205383, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    14. Severini, Simone & Tantari, Antonella, 2014. "How do different off-farm income sources affect income inequality among farm households?," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182843, European Association of Agricultural Economists.
    15. Severini, Simone & Tantari, Antonella, 2015. "The distributional impact of agricultural policy tools on Italian farm household incomes," Journal of Policy Modeling, Elsevier, vol. 37(1), pages 124-135.

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