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Loan Programs, Target Prices, And Storage Subsidies

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  • Berck, Peter
  • Schmitz, Andrew

Abstract

In a simple model incorporating uncertainty and not risk aversion, loan programs and target price programs can stabilize prices; but if the programs' price is the nonprogram average price, the stabilized quantity will exceed the nonprogram average quantity. A target price program is more expansionary than a loan program. Without target prices in place, government storage subsidies is favored by producers; but with such a program, they oppose ,them.

Suggested Citation

  • Berck, Peter & Schmitz, Andrew, 1982. "Loan Programs, Target Prices, And Storage Subsidies," 1982 Annual Meeting, August 1-4, Logan, Utah 279182, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea82:279182
    DOI: 10.22004/ag.econ.279182
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    References listed on IDEAS

    as
    1. Paul A. Samuelson, 1972. "The Consumer Does Benefit from Feasible Price Stability," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 86(3), pages 476-493.
    2. T. D. Wallace, 1962. "Measures of Social Costs of Agricultural Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 44(2), pages 580-594.
    3. Benton F. Massell, 1969. "Price Stabilization and Welfare," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(2), pages 284-298.
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