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Npr - The Role Of U. S. Safety Net Programs In Incentivizing Farm Growth: A Simulation Approach

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  • Richardson, James W.
  • Outlaw, Joe L.

Abstract

Safety net programs affect farm income and farmers ability to manage risk. Some economists argue that safety net programs benefit large farmers more and accelerate farm consolidation. The purpose of the paper is to test the hypothesis that the U.S. 2014 Farm Bill safety net programs are structurally biased to benefit large crop farms in the United States. A Monte Carlo simulation of 16 pairs of moderate and large farms in principal production regions of the U.S. are analyzed to estimate the $/hectare benefits of farm programs (ARC and PLC) and federal crop insurance. Results of the analysis suggest that for commercial size crop farms, safety net programs provide greater $/hectare benefits to moderate size farms compared to large farms. Additionally, the analysis showed that crop insurance programs are essentially neutral, providing about equal benefits to moderate and large scale crop farms.

Suggested Citation

  • Richardson, James W. & Outlaw, Joe L., 2017. "Npr - The Role Of U. S. Safety Net Programs In Incentivizing Farm Growth: A Simulation Approach," 21st Congress, Edinburgh, Scotland, July 2-7, 2017 345821, International Farm Management Association.
    • Handle: RePEc:ags:ifma17:345821
    DOI: 10.22004/ag.econ.345821
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    References listed on IDEAS

    as
    1. Richardson, James W. & Lemieux, Catharine M. & Nixon, Clair J., 1983. "Entry into Farming: The Effects of Leasing and Leverage on Firm Survival," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 15(2), pages 139-145, December.
    2. Brent Hueth, 2000. "The Goals of U.S. Agricultural Policy: A Mechanism Design Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 14-24.
    3. Adams, Gary M. & Richardson, James W., 2001. "Exploring Options for a New Farm Bill," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(2), pages 261-270, August.
    4. Richardson, James W. & Nixon, Clair J., 1984. "The Effects of the 1980, 1981, and 1982 Tax Laws on Texas Rice Farmers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 16(1), pages 137-144, July.
    5. Richardson, James W. & Nixon, Clair J., 1982. "Producer'S Preference For A Cotton Farmer Owned Reserve: An Application Of Simulation And Stochastic Dominance," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 7(1), pages 1-10, July.
    6. 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, Cambridge University Press, vol. 32(2), pages 299-315, August.
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    Farm Management; Risk and Uncertainty;

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