Farm price and income policy: lessons from history

Abstract

U.S. farm commodity support programs encompass nearly three quarters of a century and three quarters of a trillion taxpayer dollars. One dividend from that effort is to learn lessons. Farm commodity programs have steadfastly maintained a primary objective of supporting the incomes of a relatively few producers of a relatively few commodities. Nonetheless, farm programs have not been static but have adapted to changing economic and political parameters. Changes in agricultural policy tend to coincide with extremes in the food supply-demand balance. Farm program income transfers leak from their intended beneficiaries to other asset owners. Economic rents, once institutionalized, retain political momentum that sustains the rents. The rise of pressure from the World Trade Organization to provide only non-market-distorting payments may challenge the continued viability of these lessons; however, the lessons also caution against discounting the extant political influence of the farm lobby. [EconLit N500, Q180]. © 2008 Wiley Periodicals, Inc.

Subsidy Incidence in Factor Markets: An Experimental Approach

“…This could inhibit new farmers' entry into the industry and decrease the mobility of assets, obscuring efficient market signals and resource use. Future support reform becomes challenging as policy expectations impact asset values (Tweeten and Zulauf, 2008) and programs become embedded in all aspects of the industry (Sumner, 2007). Government-supported crop insurance and disaster payments also have been found to have a significant unintended impact on land use, notably on increasing conversion rates of native grassland to cropland (Claassen, Cooper, and Carriazo, 2011).…”

Market Versus Agriculture in Poland – Macroeconomic Relations of Incomes, Prices and Productivity in Terms of the Sustainable Development Paradigm

“…This dependency is a result of both "forced consumption of food" and a demand barrier in agriculture (Daszkowska 2008). Demand elasticity is also higher in the case of specialist crops and animal production than in the case of products which have been granted institutional support (Tweeten, Zulauf 2008).…”

Economic size of farms and adjustments of the total factor productivity to the business cycle in Polish agriculture

“…According to some of them, the wrong price expectations in the agriculture in Poland result from a low price elasticity of demand for the massively produced food which dominates the food market in Poland (Daszkowska 2008). Demand elasticity is also lower in the case of products which have been granted the institutional support (Tweeten and Zulauf 2008). It is also suggested that, because of the international integration, which allows the export of the surplus production of food products or the import of goods in the deficit periods, it is possible to lower the elasticity of supply in Poland (Musiał and Wojewodzic 2013).…”