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An Analysis of U.S. Farm Income Policies: Historical, Market-Determined, and Sector-Wide Stabilization

Published online by Cambridge University Press:  05 September 2016

Howard McDowell ,
Randall A. Kramer  and
J. Michael Price
Howard McDowell
Affiliation:
Economic Research Service, U.S. Department of Agriculture
Randall A. Kramer
Affiliation:
Center for Resource and Environmental Policy Research, Duke University
J. Michael Price
Affiliation:
Economic Research Service, U.S. Department of Agriculture
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Abstract

This paper provides an economic analysis of the historical agricultural price and income support policy, a policy of market-determined prices and income, and a policy linking market-determined prices with sector-wide farm income stabilization in years of economic disaster. The analysis compares commodity prices, net farm income, and government expenditures over the period 1970 through 1982 based on estimates generated by USDA's Food and Agricultural Policy Simulator (FAPSIM). The historical policy generates the highest income and most stable prices. Market-determined income is lowest and has the greatest variability. Stabilization minimized income variability at intermediate income levels.

Keywords

agricultural policyprice stabilizationincome stabilizationdecoupling
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 21 , Issue 2 , December 1989 , pp. 1 - 11
Copyright
Copyright © Southern Agricultural Economics Association 1989

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