IDEAS home Printed from https://ideas.repec.org/p/ags/cudawp/6875.html
   My bibliography  Save this paper

The Dynamic Effects Of Agricultural Subsidy Programs In The United States

Author

Listed:
  • de Gorter, Harry
  • Fisher, Eric O'N.

Abstract

This paper analyzes the dynamic effects of the acreage restrictions and land diversion requirements that are characteristic of the farm subsidy programs in the United States. The subsidy payments a farmer receives are based upon historical base acreage, and it 1s sometimes optimal for a farmer not to participate in a pr9gr~m in order to increase base acreage in anticipation of higher future subsidies. This paper determines the farmer's optimal policy as the solution to a deterministic dynamic program. It shows that farmers with low base acreage typically opt out of these programs, whereas those with high base acreage participate in them. The paper concludes with an examination of aggregate data from the programs involving barley, corn, cotton, oats, rice, sorghum, and wheat during 1987. It shows that these programs actually increase the aggregate output of each of these crops and that they represent an annual deadweight loss of more than $3 billion.

Suggested Citation

  • de Gorter, Harry & Fisher, Eric O'N., 1989. "The Dynamic Effects Of Agricultural Subsidy Programs In The United States," Working Papers 6875, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudawp:6875
    DOI: 10.22004/ag.econ.6875
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/6875/files/wp890009.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.6875?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Labson, B. Stephen, 1994. "Modeling distortionary aspects of the U.S. wheat program and policy reform," Journal of Policy Modeling, Elsevier, vol. 16(3), pages 237-263, June.
    2. Robinson, Sherman, 1990. "Analyzing Agricultural Trade Liberalization with Single-Country Computable General Equilibrium Models," CUDARE Working Papers 198502, University of California, Berkeley, Department of Agricultural and Resource Economics.
    3. de Gorter, Harry & Fisher, Eric O'N., 1993. "The Dynamic Effects Of Agricultural Subsidies In The United States," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(2), pages 1-13, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:cudawp:6875. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/dacorus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.