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A Stochastic Analysis of Proposals for the New US Farm Bill

Author

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  • Binfield, Julian C.R.
  • Adams, Gary M.
  • Westhoff, Patrick C.
  • Young, Robert E., II

Abstract

Most of the large scale modeling systems used in the analysis of agricultural policies produce deterministic projections. In reality, however, the agricultural sector is subject to a high degree of uncertainty as a result of fluctuations in exogenous factors such as the weather or macroeconomic variation. A stochastic approach can provide additional information to policy makers regarding the implications of this uncertainty, through the use of stochastically generated projections. This paper also shows how deterministic analysis may result in systematic errors in the projection of some variables. As an applied example, the FAPRI model of the US agricultural sector is simulated stochastically to analyse the impact of proposals for the new US farm bill.

Suggested Citation

  • Binfield, Julian C.R. & Adams, Gary M. & Westhoff, Patrick C. & Young, Robert E., II, 2002. "A Stochastic Analysis of Proposals for the New US Farm Bill," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24913, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae02:24913
    DOI: 10.22004/ag.econ.24913
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    File URL: https://ageconsearch.umn.edu/record/24913/files/cp02bi05.pdf
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    References listed on IDEAS

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    1. Bruce A. Babcock & John C. Beghin & Samarendu Mohanty & Frank H. Fuller & Jacinto F. Fabiosa & Sudhir Chaudhary & Phillip Kaus & Cheng Fang & Chad E. Hart & Karen Kovarik, 1999. "Analysis of the Berlin Accord Reforms of the European Union's Common Agricultural Policy," Center for Agricultural and Rural Development (CARD) Publications 99-bp24, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Richardson, James W. & Klose, Steven L. & Gray, Allan W., 2000. "An Applied Procedure For Estimating And Simulating Multivariate Empirical (Mve) Probability Distributions In Farm-Level Risk Assessment And Policy Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(2), pages 1-17, August.
    3. repec:ags:joaaec:v:32:y:2000:i:2:p:299-315 is not listed on IDEAS
    4. Craig Jagger & David Hull, 1997. "Calling the One-Sided Bet: A Case Study of Budget Scoring in the 1996 Farm Bill," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 19(1), pages 178-192.
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    Citations

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    Cited by:

    1. Zhu, Xiaohong, 2016. "New models to estimate costs of US farm programs," ISU General Staff Papers 201601010800006209, Iowa State University, Department of Economics.
    2. Zhu, Xiaohong, 2016. "New models to estimate costs of US farm programs," ISU General Staff Papers 3547, Iowa State University, Department of Economics.
    3. Davids, T. & Meyer, F. & Westhoff, P., 2018. "Quantifying the regional impact of export controls in Southern African maize markets," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277353, International Association of Agricultural Economists.
    4. Meyer, Seth D. & Binfield, Julian C.R. & Westhoff, Patrick C., 2010. "Making the market: How U.S. Policy influences near term agriculture and biofuel industry production and profitability under technology adoption," 114th Seminar, April 15-16, 2010, Berlin, Germany 61089, European Association of Agricultural Economists.

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    Agricultural and Food Policy;

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