IDEAS home Printed from https://ideas.repec.org/a/ags/jlaare/30961.html
   My bibliography  Save this article

The Dynamic Effects Of Agricultural Subsidies In The United States

Author

Listed:
  • de Gorter, Harry
  • Fisher, Eric O'N.

Abstract

This article analyzes the dynamics effects of the farm subsidies in the United States. The subsidies a farmer receives are based upon historical plantings, also called based acreage. It is sometimes optimal for a farmer temporarily not to participate in a program in order to increase future subsidies. The farmer's optimal policy is the solution to a deterministic dynamic program. Farmers with low base acreage opt out of these programs, whereas those with high base acreage participate in them. The article examines aggregate data involving corn, cotton, rice, and wheat during 1987. It shows that these programs increase the output of each of these crops and represent an annual deadweight loss of more than $2 billion.

Suggested Citation

  • de Gorter, Harry & Fisher, Eric O'N., 1993. "The Dynamic Effects Of Agricultural Subsidies In The United States," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(2), pages 1-13, December.
    • Handle: RePEc:ags:jlaare:30961
    DOI: 10.22004/ag.econ.30961
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/30961/files/18020147.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.30961?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lichtenberg, Erik & Zilberman, David, 1986. "The Welfare Economics of Price Supports in U.S. Agriculture," American Economic Review, American Economic Association, vol. 76(5), pages 1135-1141, December.
    2. Eckstein, Zvi, 1984. "A Rational Expectations Model of Agricultural Supply," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 1-19, February.
    3. Eric O'N. Fisher & Harry de Gorter, 1992. "The International Effects of U.S. Farm Subsidies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 258-267.
    4. de Gorter, Harry & Fisher, Eric O'N., 1989. "The Dynamic Effects Of Agricultural Subsidy Programs In The United States," Working Papers 6875, Cornell University, Department of Applied Economics and Management.
    5. McElroy, Robert & Ali, Mir & Dismukes, Robert & Clauson, Annette, 1989. "Costs of Production for Major U.S. Crops, 1975-87," Staff Reports 278202, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gohin, Alexandre & Bureau, Jean-Christophe, 2005. "Sugar Market Liberalization: Modeling the EU Supply of "C" Sugar," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24740, European Association of Agricultural Economists.
    2. Karl D. Meilke & Don McClatchy & Harry de Gorter, 1996. "Challenges in quantitative economic analysis in support of multilateral trade negotiations," Agricultural Economics, International Association of Agricultural Economists, vol. 14(3), pages 185-200, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dicks, Michael R., 1996. "Regional Adjustment Costs: A Failure Of National Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 28(1), pages 1-11, July.
    2. Sumru Altug, 2004. "Lecture Notes on Macroeconomics," Working Papers 2004/18, Turkish Economic Association.
    3. Burton, Diana M. & Love, H. Alan, 1996. "A Review of Alternative Expectations Regimes in Commodity Markets: Specification, Estimation, and Hypothesis Testing Using Structural Models," Agricultural and Resource Economics Review, Cambridge University Press, vol. 25(2), pages 213-231, October.
    4. CARPENTIER, Alain & GOHIN, Alexandre & SCKOKAI, Paolo & THOMAS, Alban, 2015. "Economic modelling of agricultural production: past advances and new challenges," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(1), March.
    5. Frisvold, George B. & Reeves, Jeanne M., 2008. "The costs and benefits of refuge requirements: The case of Bt cotton," Ecological Economics, Elsevier, vol. 65(1), pages 87-97, March.
    6. Hyunseok Kim & GianCarlo Moschini, 2018. "The Dynamics of Supply: U.S. Corn and Soybeans in the Biofuel Era," Land Economics, University of Wisconsin Press, vol. 94(4), pages 593-613.
    7. Baker, Mindy L. & Hayes, Dermot J. & Babcock, Bruce A., 2008. "Crop-Based Biofuel Production under Acreage Constraints and Uncertainty," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6352, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Wall, Charles A. & Fisher, Brian S., 1988. "Supply Response and the Theory of Production and Profit Functions," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), pages 1-22, December.
    9. Mindy L. Mallory & Dermot J. Hayes & Bruce A. Babcock, 2011. "Crop-Based Biofuel Production with Acreage Competition and Uncertainty," Land Economics, University of Wisconsin Press, vol. 87(4), pages 610-627.
    10. Brosig, Stephan & Hockmann, Heinrich (ed.), 2005. "How effective is the invisible hand? Agricultural and food markets in Central and Eastern Europe," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 31, number 93018.
    11. Matthew T. Holt & Andrew M. McKenzie, 2003. "Quasi-rational and ex ante price expectations in commodity supply models: an empirical analysis of the US broiler market," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(4), pages 407-426.
    12. Wenting Wang & Longbao Wei, 2021. "Impacts of agricultural price support policy on price variability and welfare: Evidence from China's soybean market," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 3-17, January.
    13. Elsa Martin & Hubert Stahn, 2013. "Potential Conflict and Inefficiencies Arising in Agri-environmental Management," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(2), pages 423-445, June.
    14. Bachewe, Fantu Nisrane & Taffesse, Alemayehu Seyoum, 2018. "Supply response of smallholder households in Ethiopia," IFPRI book chapters, in: The economics of teff: Exploring Ethiopia’s biggest cash crop, chapter 8, pages 181-204, International Food Policy Research Institute (IFPRI).
    15. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    16. Skold, Karl Durwood, 1989. "The integration of alternative information systems: an application to the Hogs and Pigs report," ISU General Staff Papers 1989010108000010239, Iowa State University, Department of Economics.
    17. David Aadland, "undated". "The economics of cattle supply," Working Papers 2000-11, Utah State University, Department of Economics.
    18. Femenia, F. & Carpentier, A. & Gohin, A. & Sodjadhin, R., 2018. "Using farm accountancy data to estimate crop rotation effects," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277161, International Association of Agricultural Economists.
    19. Van Kooten, G. C. & Spriggs, John & Schmitz, Andrew, 1989. "The Impact of Canadian Commodity Stabilization Programs on Risk Reduction and the Supply of Agricultural Commodities," Working Papers 244037, Agriculture and Agri-Food Canada.
    20. Rajagopal, Deepak & Zilberman, David, 2007. "Review of environmental, economic and policy aspects of biofuels," Policy Research Working Paper Series 4341, The World Bank.

    More about this item

    Keywords

    Agricultural and Food Policy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlaare:30961. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/waeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.