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Michigan: A State at the Intersection of the Debate over Full Planting Flexibility

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  • Thornsbury, Suzanne
  • Martinez, Lourdes R.
  • Schweikhardt, David B.

Abstract

Greater flexibility in U.S. farm programs with elimination of the restriction on the planting of fruit and vegetable crops (FAVR crops) is likely to be a major issue in congressional 2007 farm policy discussions. Michigan is a state with a wide range of both FAVR and program crops planted under the current policy. To capture the diversity of situations that would apply among of crops covered by the current policy, this research has examined a broad set of Michigan FAVR crops (dry beans, pickling cucumbers, processing tomatoes, fresh market tomatoes, squash, and blueberries). We evaluate both those factors that are likely to prevent the entry of DCP crop producers into the production of FAVR crops (barriers to entry or disincentives) and those factors that are likely to encourage DCP crop producers to enter the production of FAVR crops (inducements to entry or incentives). The balance will determine the likely outcome from elimination of the FAVR. With the exception of dry beans, a change in the FAVR would provide only small (or no) positive incentives for DCP crop producers to enter the production of FAVR crops. Similarly, barriers to entry would, in many cases, be high enough to significantly limit, or even prohibit, movement of DCP crop producers into the markets for FAVR crops. When considering these factors in combination, only dry beans appear to have the potential for entry of a significant number of new producers. In most other cases, the probability of entry by new producers appears to be low. Even with a low or zero response in total supply, equity issues will likely still arise.

Suggested Citation

  • Thornsbury, Suzanne & Martinez, Lourdes R. & Schweikhardt, David B., 2007. "Michigan: A State at the Intersection of the Debate over Full Planting Flexibility," Agricultural Economic Report Series 10925, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midaae:10925
    DOI: 10.22004/ag.econ.10925
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    References listed on IDEAS

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    1. Falatoonzadeh, Hamid & Conner, J. Richard & Pope, Rulon D., 1985. "Risk Management Strategies To Reduce Net Income Variability For Farmers," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(1), pages 1-14, July.
    2. Teague, Paul W. & Lee, John G., 1988. "Risk Efficient Perennial Crop Selection: A Motad Approach To Citrus Production," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 20(2), pages 1-8, December.
    3. Falatoonzadeh, Hamid & Conner, J. Richard & Pope, Rulon D., 1985. "Risk Management Strategies to Reduce Net Income Variability for Farmers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 17(1), pages 117-130, July.
    4. Teague, Paul W. & Lee, John G., 1988. "Risk Efficient Perennial Crop Selection: A Motad Approach to Citrus Production," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 20(2), pages 145-152, December.
    5. Outlaw, Joe L. & Richardson, James W. & Fumasi, Roland J., 2006. "Lifting the Fruit and Vegetable Cropping Restriction: Potential Impacts on Cropping Preference in the Lower Rio Grande Valley, Texas," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35373, Southern Agricultural Economics Association.
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    Cited by:

    1. Thornsbury, Suzanne, 2008. "Impacts of FAVR Restriction Elimination on the Dry Bean Industry in the Upper Midwest," Agricultural Economic Report Series 44218, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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