Economic Analysis of Base Acre and Payment Yield Designations Under the 2002 U.S. Farm Act

47 Pages Posted: 21 Oct 2005

See all articles by Edwin Young

Edwin Young

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Paul Westcott

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Linwood Hoffman

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Date Written: September 2005

Abstract

The 2002 Farm Act provided farmland owners the opportunity to update commodity program base acres and payment yields used for calculating selected program benefits. Findings in this report suggest that farmland owners responded to economic incentives in these decisions, selecting those options for designating base acres that resulted in the greatest expected flow of program payments. Decisions of farmland owners in South Dakota, in upland cotton area, and in the Heartland region support the payment-maximization argument. In general, landowners favored maximizing payments over aligning base acres to current or recent plantings. Farmland owners with high-payment base acres, such as rice and cotton, held on to these base acres and, whenever possible, expanded them. Analogously, landowners with low-payment commodity base acres, such as oats and barley, switched to higher payment commodities whenever possible.

Keywords: base, 2002 Farm Act, direct payments, counter-cyclical payments, production

Suggested Citation

Young, Edwin and Westcott, Paul and Hoffman, Linwood, Economic Analysis of Base Acre and Payment Yield Designations Under the 2002 U.S. Farm Act (September 2005). USDA-ERS Economic Research Report 12, Available at SSRN: https://ssrn.com/abstract=822891 or http://dx.doi.org/10.2139/ssrn.822891

Edwin Young (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5336 (Phone)

Paul Westcott

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5335 (Phone)

Linwood Hoffman

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
47
Abstract Views
744
PlumX Metrics