Author
Listed:
- Smith, Edward G.
- Richardson, James W.
- Knutson, Ronald D.
- Womack, Abner W.
- Anderson, David P.
- Outlaw, Joe L.
Abstract
Of the many issues associated with modifying the 1996 FAIR Act, equitability of government support across program commodities ranks high on the list of priorities. This concern is associated with both a limited amount of government support and the method that can be used to derive or ascertain some measure of equitability. Likewise, government support that is out of balance across commodities can likely become the supply inducing expected revenue -- which tends to erode market signals. This may be particularly true in times of very low (below loan rate) prices. A reference point commonly used to focus this debate is the variable cost of production per unit of commodity produced. The reason for selecting this measure is that it only reflects costs associated with planting to harvest of the crop. Other costs are deliberately excluded such that comparisons can more easily be made across commodities and regions. Obviously, other costs such as land are important and are included in the total cost of production. However, a logical first step in an economic evaluation of equitability for government support across commodities is the expected unit of return relative to the variable cost of production. After making this derivation, it is relatively easy to calculate whether the margin generated will support other costs including -- land, taxes, a return to management, etc.
Suggested Citation
Smith, Edward G. & Richardson, James W. & Knutson, Ronald D. & Womack, Abner W. & Anderson, David P. & Outlaw, Joe L., 2001.
"Equitability of Government Support Across Major Crop Commodities: A Method of Comparism,"
Working Papers
42768, Texas A&M University, Agricultural and Food Policy Center.
Handle:
RePEc:ags:tamfwp:42768
DOI: 10.22004/ag.econ.42768
Download full text from publisher
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:tamfwp:42768. 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/aftamus.html .
Please note that corrections may take a couple of weeks to filter through
the various RePEc services.