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Marketing Quotas and Random Yields: Marginal Effects of Inframarginal Subsidies on Peanut Supply

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  • Robert B. Borges
  • Walter N. Thurman

Abstract

The U.S. peanut program restricts domestic sales with poundage quota but allows surplus production to be exported or crushed. Empirical analysis of North Carolina peanut production reveals that the marginal (and lower) price received by production above quota, that is the world price, is far more important in determining acreage than is the inframarginal subsidy of the quota support price.

Suggested Citation

  • Robert B. Borges & Walter N. Thurman, 1994. "Marketing Quotas and Random Yields: Marginal Effects of Inframarginal Subsidies on Peanut Supply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 809-817.
    • Handle: RePEc:oup:ajagec:v:76:y:1994:i:4:p:809-817.
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    Cited by:

    1. Hennessy, David A. & Wei, Wei, 2000. "Decisions and tradable production quota when yield is uncertain," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(2), pages 1-15.
    2. Thurman, Walter N. & Chvosta, Jan & Brown, Blake A. & Rucker, Randal R., 2003. "The End Of Supply Controls: The Economic Effects Of Recent Change In Federal Peanut Policy," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35041, Southern Agricultural Economics Association.
    3. Nancy H. Chau & Harry de Gorter, 2005. "Disentangling the Consequences of Direct Payment Schemes in Agriculture on Fixed Costs, Exit Decisions, and Output," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1174-1181.
    4. Singerman, Ariel & Hart, Chad E. & Lence, Sergio H., 2012. "Revenue Protection for Organic Producers: Too Much or Too Little?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(3), pages 1-20.
    5. Ramsey, A. Ford & Tack, Jesse B. & Balota, Maria, 2021. "Double or Nothing: Impacts of Warming on Crop Quantity, Quality, and Revenue," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(1), January.
    6. Just, David R. & Kropp, Jaclyn D., 2009. "Production Incentives from Static Decoupling: Entry, Exit and Use Exclusion Restrictions," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49158, Agricultural and Applied Economics Association.
    7. María Bielza & Alberto Garrido & José M. Sumpsi, 2004. "Revenue insurance as an income stabilization policy: an application to the Spanish olive oil sector," Post-Print hal-01201063, HAL.
    8. Kropp, Jaclyn D. & Whitaker, James B., 2009. "The Impact of Decoupled Payments on the Cost of Operating Capital," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49311, Agricultural and Applied Economics Association.
    9. Watten, Asa & Hennessy, David A. & Zhao, Jinhua, 2018. "Insurance and American Options in Intra-season Cropping Choices with Applications," 2018 Annual Meeting, August 5-7, Washington, D.C. 274480, Agricultural and Applied Economics Association.
    10. Ying-Erh Chen & Barry K Goodwin, 2015. "Policy Design of Multi-Year Crop Insurance Contracts with Partial Payments," PLOS ONE, Public Library of Science, vol. 10(12), pages 1-15, December.
    11. Jaclyn D. Kropp & Ani L. Katchova, 2011. "The effects of direct payments on liquidity and repayment capacity of beginning farmers," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 71(3), pages 347-365, November.
    12. Jaclyn D. Kropp & James B. Whitaker, 2011. "The impact of decoupled payments on the cost of operating capital," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 71(1), pages 25-40, May.
    13. Bielza, María & Garrido, Alberto & Sumpsi, José M., 2004. "Revenue insurance as an income stabilization policy: an application to the Spanish olive oil sector," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 70.
    14. Ramsey, Austin F. & Goodwin, Barry K., 2024. "A Different 'Law of One Price:' Missouri's Livestock Marketing Law of 1999," 2024 Annual Meeting, July 28-30, New Orleans, LA 343679, Agricultural and Applied Economics Association.
    15. Fraser, Rob W., 1995. "A Note: A Clarification Of The Role Of Yield Uncertainty In Influencing Over-Quota Production," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(2), pages 1-5, August.
    16. Ekaterina Vorotnikova & Serhat Asci & James L. Seale, 2018. "Joint production, land allocation, and the effects of the production flexibility program," Empirical Economics, Springer, vol. 55(3), pages 1121-1143, November.
    17. María Bielza & Alberto Garrido & José M. Sumpsi, 2004. "Revenue insurance as an income stabilization policy: an application to the Spanish olive oil sector," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 70, pages 5-27.
    18. Chvosta, Jan & Rucker, Randal R. & Thurman, Walter N., 2001. "Peanut Quota Markets And Peanut Production After Fair," 2001 Annual meeting, August 5-8, Chicago, IL 20557, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Peckham, Janet G. & Kropp, Jaclyn D., 2012. "Decoupled Direct Payments under Base Acreage and Yield Updating Uncertainty: An Investigation of Agricultural Chemical Use," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(2), pages 1-17, August.
    20. Lee, Dae-Seob & Kennedy, P. Lynn & Fletcher, Stanley M., 2006. "An Analysis of Latin American Peanut Trade," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(1), pages 1-16, April.
    21. Ben Groom & Phoebe Koundouri & Celine Nauges & Alban Thomas, 2003. "Irrigation water management under risk: An application to Cyprus," DEOS Working Papers 0306, Athens University of Economics and Business.

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