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The Devil’s in the Details:Why a Revenue-based Farm Program is No Panacea

Author

Listed:
  • Keith H. Coble
  • J. Corey Miller

    (Department of Agricultural Economics, Mississippi State University)

Abstract

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.

Suggested Citation

  • Keith H. Coble & J. Corey Miller, 2006. "The Devil’s in the Details:Why a Revenue-based Farm Program is No Panacea," Working Papers 9602, Mississippi State University, Department of Agricultural Economics, revised Jul 2006.
    • Handle: RePEc:mss:wpaper:9602
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    File URL: http://www.agecon.msstate.edu/REPeC/mss/wpaper/The_Devils_in_the_Details.pdf
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    File URL: http://www.agecon.msstate.edu/REPeC/mss/wpaper/The_Devils_in_the_Details.pdf
    File Function: Revised version, 2006
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    Cited by:

    1. Coble, Keith H. & Thomas, Sarah E. & Miller, J. Corey, 2007. "The Effect of Changing Government Subsidy Programs: An Analysis of Revenue at the Farm level," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34931, Southern Agricultural Economics Association.
    2. Feng, Siyi & Patton, Myles & Binfield, Julian C.R. & Davis, John, 2014. "Assessing the costs of risk management tools: A crop insurance scenario based on a stochastic partial equilibrium model approach," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 170538, Agricultural Economics Society.
    3. Ghahremanzadeh, Mohammad & Mohammadrezaei, Rassul & Dashti, Ghader & Ainollahi, Moharram, . "Designing a whole-farm revenue insurance for agricultural crops in Zanjan province of Iran," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 17(02).

    More about this item

    Keywords

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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