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Acreage Effects Of Decoupled Programs At The Extensive Margin

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  • Goodwin, Barry K.
  • Mishra, Ashok K.

Abstract

This analysis utilizes farm-level data to evaluate the extent to which U.S. farm program benefits, particularly the Agricultural Market Transition Act (AMTA) and market loss assistance payments, bring about distortions in production for wheat and barley production in the Northern Great Plains. The issue is important in light of the upcoming WTO negotiations and debate over the distortionary effects of such decoupled ("green-box") payments. Our results suggest that a modest, though statistically significant effect on acreage may have been evoked by AMTA payments. In particular,if the over $45 billion allocated to AMTA payments and market loss assistance had been doubled, wheat acreage may have been 7% greater and barley acreage may have been 12.8% higher. Models of land idling suggest that AMTA payments have a very modest effect on land idling in this region. We note that the nature of our data may result in an upward bias in AMTA and MLA payment effects, such that our analysis provides conservative estimates.

Suggested Citation

  • Goodwin, Barry K. & Mishra, Ashok K., 2003. "Acreage Effects Of Decoupled Programs At The Extensive Margin," 2003 Annual meeting, July 27-30, Montreal, Canada 22254, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22254
    DOI: 10.22004/ag.econ.22254
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    Cited by:

    1. Joo, Hyunjeong & Mishra, Ashok, 2016. "Impact of Off-Farm Labor Supply and Government Subsidy on Korean Farmland Value," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235748, Agricultural and Applied Economics Association.
    2. Renwick, Alan W. & Jansson, Torbjorn & Thomson, Steven & Revoredo-Giha, Cesar & Barnes, Andrew Peter, 2011. "The Economic Impact of allowing Partial Decoupling under the 2003 Common Agricultural Policy reforms on Scottish agriculture," Working Papers 131461, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    3. Thompson, Wyatt & Gerlt, Scott & Dewbre, Joe H. & Effland, Anne B., 2020. "Rescuing the Decoupling Literature from Incomparable Chaos," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304366, Agricultural and Applied Economics Association.

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