The Devil’s in the Details:Why a Revenue-based Farm Program is No Panacea
Producer and other interest groups are beginning to consider farm policy positions in anticipation of hearings and possible serious farm bill debates during late 2006 and 2007. An idea gaining attention and support among some groups is deemphasizing or eliminating the current commodity “price” programs (loan deficiency payments and counter-cyclical payments) and replacing them with programs based on “revenue insurance” designs. Suggested designs include a multi-tiered farm payment program based on individual revenue guarantees and shortfalls in county revenue. Another example of such an alternative design is a whole-farm revenue design that issues program payments when adjusted gross farm revenue falls below a historical five-year baseline. Interestingly, programs quite similar to both proposals have been offered by USDA’s Risk Management Agency (RMA) since 1999 as part of the federal crop insurance program. In this paper, we evaluate the implications of using revenue-based designs as the primary U.S. farm support program. Our analysis considers implementation issues, distributional effects of such a change, and implications for compliance with WTO rules.
|Date of creation:||Jan 2006|
|Date of revision:||Jul 2006|
|Contact details of provider:|| Postal: Box 9755, Mississippi State, MS 39762-9755|
Phone: (601) 325-2750
Fax: (601) 325-8777
Web page: http://www.agecon.msstate.edu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bruce A. Babcock & Chad E. Hart, 2005. "How Much "Safety" Is Available under the U.S. Proposal to the WTO?," Center for Agricultural and Rural Development (CARD) Publications 05-bp48, Center for Agricultural and Rural Development (CARD) at Iowa State University.
When requesting a correction, please mention this item's handle: RePEc:mss:wpaper:9602. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amit Uppal)
If references are entirely missing, you can add them using this form.