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Economic Effects of Mandatory Production Controls

Author

Listed:
  • Young, C. Edwin
  • Hyberg, Brent T.
  • Price, J. Michael
  • Huang, Wen-Yuan
  • Lee, Chinkook
  • Sharples, Jerry L.
  • Dvoskin, Dan

Abstract

Mandatory restrictions on agricultural production continue to be advocated as an alternative policy for increasing farm income while reducing farm program costs. Although farm income might rise in the short run, such programs would be costly to consumers and possibly to the Federal Treasury. An export subsidy would be needed to maintain current agricultural export levels if a mandatory production control program were used to raise prices. The cost of such a subsidy could exceed savings from eliminating Government income support programs. The program would affect agribusinesses by reducing the need for farm supplies and by reducing the amount of product handled beyond the farm gate. More generally, programs that idle productive resources to maintain higher prices may lead to production inefficiencies and to capitalization of program benefits that are captured by current landowners.

Suggested Citation

  • Young, C. Edwin & Hyberg, Brent T. & Price, J. Michael & Huang, Wen-Yuan & Lee, Chinkook & Sharples, Jerry L. & Dvoskin, Dan, 1989. "Economic Effects of Mandatory Production Controls," Agricultural Economic Reports 308047, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerser:308047
    DOI: 10.22004/ag.econ.308047
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    References listed on IDEAS

    as
    1. Salathe, Larry E. & Price, J. Michael & Gadson, Kenneth E., 1982. "The Food and Agricultural Policy Simulator," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 34(2), pages 1-15, April.
    2. Salathe, Larry E. & Price, J. Michael & Gadson, Kenneth E., 1982. "The Food and Agricultural Policy Simulator: The Dairy-Sector Submodel," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 34(3), pages 1-14, July.
    3. Huang, Wen-Yuan & Dicks, Michael R. & Hyberg, Bengt T. & Webb, Shwu-Eng & Ogg, Clayton, 1988. "Land use and soil erosion: a national linear programming model," Technical Bulletins 312289, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Dobbs, Thomas L. & Becker, David L. & Taylor, Donald C., 1990. "Sustainable Agriculture Policy Analyses: South Dakota On-Farm Case Studies," Economics Staff Papers 232174, South Dakota State University, Department of Economics.
    2. Becker, David L. & Dobbs, Thomas L., 1990. "Implications of a Mandatory Supply Control Program for Sustainable Agriculture in South Dakota," Economics Research Papers 232147, South Dakota State University, Department of Economics.

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