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Alternative Government Rice Programs: An Economic Evaluation

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  • Grant, Warren R.
  • Moore, Donald S.

Abstract

A model designed to indicate the effects of alternative Government rice programs gave an inelastic domestic demand (-.14) and an elastic export demand (-1.57) for U.S. rice in 1970. With no price change, about 98 percent of the production from any increase in rice allotments would have to be exported. Changing the support price influences domestic consumption in the opposite direction of the price change, but not proportional to the price change. Selection of the best of three types of programs examined (two-price plan, direct payment plan, and current program) must depend on determining who, consumer or taxpayer, should bear the costs of the program. With no Government rice programs, an equilibrium price of $3.40 and production of 138.7 million hundredweight would result. The rice industry with monopoly control of distribution could market the same output at a much higher price ($6.04) by using price discrimination between the domestic and export markets.

Suggested Citation

  • Grant, Warren R. & Moore, Donald S., 1970. "Alternative Government Rice Programs: An Economic Evaluation," Agricultural Economic Reports 307408, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerser:307408
    DOI: 10.22004/ag.econ.307408
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    References listed on IDEAS

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    1. Unknown, 1966. "Foreign Agricultural Trade By Countries, Calendar Year 1965," Foreign Agricultural Trade of the United States (FATUS) 164095, United States Department of Agriculture, Economic Research Service.
    2. Hee, Olman, 1967. "Demand and Price Analysis for Potatoes," Technical Bulletins 171576, United States Department of Agriculture, Economic Research Service.
    3. Grant, Warren R., 1967. "A Model for Estimating Costs of Government Export Programs for Rice," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 19(3), pages 1-8, July.
    4. Foote, Richard J., 1958. "Analytical Tools for Studying Demand and Price Structures," Technical Resources 316560, United States Department of Agriculture, Agricultural Marketing Service, Transportation and Marketing Program.
    5. Fox, Karl A., 1953. "The Analysis of Demand for Farm Products," Technical Bulletins 156646, United States Department of Agriculture, Economic Research Service.
    6. George E. Frick & Richard A. Andrews, 1965. "Aggregation Bias and Four Methods of Summing Farm Supply Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(3), pages 696-700.
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    Cited by:

    1. Grant, Warren R. & Beach, John & Lin, William, 1984. "Factors Affecting Supply, Demand, And Prices Of U.S. Rice," Staff Reports 277629, United States Department of Agriculture, Economic Research Service.
    2. Brandow, G.E., 1977. "PART III. Policy for Commerical Agriculture, 1945-71," AAEA Monographs, Agricultural and Applied Economics Association, number 337215, january.
    3. Grant, Warren R. & Holder, Shelby H., Jr. & Ericksen. Milton H., 1980. "Rice: Analytical Base and Policy Issues," Staff Reports 321187, United States Department of Agriculture, Economic Research Service.
    4. Brandow, George E., 1977. "Policy for Commercial Agriculture, 1945-71," A Survey of Agricultural Economics Literature, Volume 1: Traditional Fields of Agricultural Economics 1940s to 1970s,, Agricultural and Applied Economics Association.

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