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Decoupled Farm Payments and Expectations for Base Updating

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  • Keith H. Coble
  • J. Corey Miller
  • M. Darren Hudson

Abstract

The degree to which U.S. farm programs are decoupled from production has been a central issue in recent trade disputes. Several authors have suggested producer expectations for base acreage and yield updating in future farm bills create an incentive to alter planting and input decisions. This article reports analysis of the subjective expectations of producers for base updating and an analysis of the effect these expectations have on producer willingness to accept a buyout of the right to update. On average, producers think the chances of updating in the next farm bill are about 40%, but less than 17% indicate adjusting acreage or yields in anticipation of updating. Copyright 2008, Oxford University Press.

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  • Keith H. Coble & J. Corey Miller & M. Darren Hudson, 2008. "Decoupled Farm Payments and Expectations for Base Updating," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 27-42.
    • Handle: RePEc:oup:revage:v:30:y:2008:i:1:p:27-42
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2007.00390.x
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    1. Darren Hudson & Diane Hite, 2003. "Producer Willingness to Pay for Precision Application Technology: Implications for Government and the Technology Industry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 51(1), pages 39-53, March.
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    4. Young, C. Edwin & Skully, David W. & Westcott, Paul C. & Hoffman, Linwood A., 2005. "Economic Analysis of Base Acre and Payment Yield Designations Under the 2002 U.S. Farm Act," Economic Research Report 33594, United States Department of Agriculture, Economic Research Service.
    5. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
    6. Mark Yuying An, 2000. "A Semiparametric Distribution for Willingness to Pay and Statistical Inference with Dichotomous Choice Contingent Valuation Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 487-500.
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    1. Bhaskar, Arathi & Beghin, John C., 2009. "How Coupled Are Decoupled Farm Payments? A Review of the Evidence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(1), pages 1-24, April.
    2. Devadoss, Stephen & Gibson, Mark J. & Luckstead, Jeff, 2016. "The Impact of Agricultural Subsidies on the Corn Market with Farm Heterogeneity and Endogenous Entry and Exit," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-20, September.
    3. Bhaskar, Arathi & Beghin, John C., 2007. "Decoupled Farm Payments and the Role of Base Updating Under Uncertainty," Working Papers 7350, Iowa State University, Department of Economics.
    4. Howley, Peter & Breen, James P. & Donoghue, Cathal O. & Hennessy, Thia, 2012. "Does the single farm payment affect farmers’ behaviour? A macro and micro analysis," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 2(1), pages 1-8, October.
    5. Erjavec, Emil & Chantreuil, Frédéric & Hanrahan, Kevin & Donnellan, Trevor & Salputra, Guna & Kozar, Maja & van Leeuwen, Myrna, 2011. "Policy assessment of an EU wide flat area CAP payments system," Economic Modelling, Elsevier, vol. 28(4), pages 1550-1558, July.
    6. Barrett E. Kirwan & Michael J. Roberts, 2016. "Who Really Benefits from Agricultural Subsidies? Evidence from Field-level Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(4), pages 1095-1113.
    7. Kehinde Oluseyi Olagunju & Myles Patton & Siyi Feng, 2020. "Estimating the Impact of Decoupled Payments on Farm Production in Northern Ireland: An Instrumental Variable Fixed Effect Approach," Sustainability, MDPI, vol. 12(8), pages 1-17, April.
    8. Bakhshi, Samira & Kerr, William A., 2009. "Is There Supply Distortion In The Green Box? An Acreage Response Approach," Working Papers 51093, Canadian Agricultural Trade Policy Research Network.
    9. Mark, Tyler B. & Detre, Joshua & D'Antoni, Jeremy & Mishra, Ashok, 2012. "Factors Influencing Farm Operator Expectations on Future Levels of Government Support," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2012, pages 1-17.
    10. Coppess, Jonathan, . "Farm Bill 2023: Planted Acres and Additional Pieces of the Base Acres Puzzle," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 13(143).
    11. 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.
    12. 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.

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