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Federal Agricultural Improvement and Reform Act of 1996: A Kansas Perspective

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  • Terry L. Kastens
  • Allen M. Featherstone

Abstract

Government program deficiency payments traditionally have played an important role in stabilizing farm incomes. With the Federal Agricultural Improvement and Reform (FAIR) Act of 1996, net farm income risk most likely will increase because government payments no longer are tied directly to production levels or commodity prices. In a simulation covering Kansas farms from 1996 through 2002, we contrast, in this analysis, expected outcomes for farm income and its variability under FAIR with those of farm legislation in place before 1996. With FAIR, payments to Kansas farmers drop from $0.58 billion in 1996 to $0.35 billion by 2002. Based on projections, payments under the 1990 farm bill would have been only $0.21 billion in 1996, but would increase to $0.44 by 2002. Although average seven-year annual incomes will be higher with FAIR, income variability will increase substantially relative to previous legislation. The smallest increases in expected income and the greatest increases in income variability will occur in arid nonirrigated regions.

Suggested Citation

  • Terry L. Kastens & Allen M. Featherstone, 1997. "Federal Agricultural Improvement and Reform Act of 1996: A Kansas Perspective," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 19(2), pages 326-349.
    • Handle: RePEc:oup:revage:v:19:y:1997:i:2:p:326-349.
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    File URL: http://hdl.handle.net/10.2307/1349745
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    Cited by:

    1. Featherstone, Allen M. & Kastens, Terry L., 2000. "Non-Parametric and Semi-Parametric Techniques for Modeling and Simulating Correlated, Non-Normal Price and Yield Distributions: Applications to Risk Analysis in Kansas Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(2), pages 267-281, August.
    2. Nivens, Heather D. & Kastens, Terry L. & Dhuyvetter, Kevin C., 2000. "Using Satellite Imagery In Kansas Crop Yield And Net Farm Income Forecasts," 2000 Conference, April 17-18 2000, Chicago, Illinois 18943, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.

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