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The Impact of the Direct Peanut Price Support Program on Farm Income and Government Cost

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  • Song, Inbum
  • Franzmann, John R.
  • Mead, John F.

Abstract

Two major programs — allotment-quota and price support — have been in force to support peanut farming since 1952. The purpose is to restrict production of peanuts while supporting the price of peanuts produced. Production is restricted through the allotment-quota program, determined by the Secretary of Agriculture, and converted to a national acreage allotment. However, minimum national acreage allotment has been fixed at 1.61 million acres. The price support program provided that price be supported no lower than 75 percent of the parity price of peanuts. Under the programs, peanuts produced by the grower are sold on the market at the support price for edible uses and excess quantities are sold to the government at the support price. Peanuts purchased by the government are stored and later sold for crushing at the going market price. Because peanuts for crushing command a much lower price than the government acquisition price, the purchase-and-resale operation results in a net loss representing public cost of the peanut price support program.

Suggested Citation

  • Song, Inbum & Franzmann, John R. & Mead, John F., 1975. "The Impact of the Direct Peanut Price Support Program on Farm Income and Government Cost," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 7(1), pages 247-252, July.
    • Handle: RePEc:cup:jagaec:v:7:y:1975:i:01:p:247-252_01
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    Cited by:

    1. Trapp, James N., 1978. "An Analysis Of The Impact Of Alternative Peanut Marketing Quotas And Support Prices," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 10(1), pages 1-6, July.
    2. Fleming, Frank N. & White, Fred C., 1976. "Marketing Quotas As An Alternative To The Present Price Support Program For Peanuts," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 8(1), pages 1-9, July.
    3. Chen, Changping & Fletcher, Stanley M., 1997. "Economic Implications Of The Fair Act On U.S. Peanut Producers," Faculty Series 16698, University of Georgia, Department of Agricultural and Applied Economics.
    4. Zhang, Ping & Fletcher, Stanley M. & Carley, Dale H., 1992. "U.S. Demand for Edible Peanuts," WAEA/ WFEA Conference Archive (1929-1995) 321346, Western Agricultural Economics Association.
    5. Chen, Changping & Fletcher, Stanley M., 1997. "Regional Economic Impacts of the 1996 U.S. Peanut Program," 1997 Annual Meeting, July 13-16, 1997, Reno\ Sparks, Nevada 35779, Western Agricultural Economics Association.

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