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Farm Level Effects of Counter-Cyclical Payments

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  • Makki, Shiva S.
  • Johnson, D. Demcey
  • Somwaru, Agapi

Abstract

The paper analyzes the role of counter-cyclical (CC) payments in stabilizing farm incomes and investigates whether the payments could affect farmers planting decisions. Our analysis, based on representative farmer approach, finds that CC payments provide a relatively modest enhancement to farm welfare. However, much depends on market price conditions, which change from year to year, and on base acreage (which is determined by planting history). The paper finds little evidence of interaction between revenue insurance and CC payments.

Suggested Citation

  • Makki, Shiva S. & Johnson, D. Demcey & Somwaru, Agapi, 2005. "Farm Level Effects of Counter-Cyclical Payments," 2005 Annual meeting, July 24-27, Providence, RI 19508, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19508
    DOI: 10.22004/ag.econ.19508
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    References listed on IDEAS

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    1. Richard E. Just & Quinn Weninger, 1999. "Are Crop Yields Normally Distributed?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 287-304.
    2. Richard E. Just & Linda Calvin & John Quiggin, 1999. "Adverse Selection in Crop Insurance: Actuarial and Asymmetric Information Incentives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 834-849.
    3. Anton, Jesus & Le Mouel, Chantal, 2003. "Do Counter-Cyclical Payments In The Fsri Act Create Incentives To Produce?," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25811, International Association of Agricultural Economists.
    4. Shogren, Jason F. & Dohlman, Erik & Chambers, William, 2003. "Behavioral Implications Of Counter-Cyclical Payments And Base Acreage Updating Under The 2002 Farm Act," 2003 Annual meeting, July 27-30, Montreal, Canada 21937, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Bhaskar, Arathi & Beghin, John C., 2009. "How Coupled Are Decoupled Farm Payments? A Review of the Evidence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(1), pages 1-24, April.
    2. Bhaskar, Arathi & Beghin, John C., 2007. "How Coupled are Decoupled Farm Payments? A Review of Coupling Mechanisms and the Evidence," Working Papers 7347, Iowa State University, Department of Economics.

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    Keywords

    Agricultural and Food Policy;

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