Stop and Go Agricultural Policies with a Land Market
This article studies the design of farm policy in the presence of asymmetric information about farmers' productivity, a government objective to insure farmers a minimum “parity” income, an endogenous land rent, and diminishing returns on alternative (nonprogram crop) land uses. In this setting, acreage set asides are never part of an optimal farm policy, although compensated acreage limits are. When there are new farmer entrants who cannot be excluded from farm programs, optimal policy takes the form of a pure voluntary acreage limitation—or “buyout”—program in which high-cost producers participate and low-cost producers do not. Copyright 2003, Oxford University Press.
Year of publication: |
2003
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Authors: | Innes, Robert |
Published in: |
American Journal of Agricultural Economics. - Agricultural and Applied Economics Association - AAEA. - Vol. 85.2003, 1, p. 198-215
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Publisher: |
Agricultural and Applied Economics Association - AAEA |
Saved in:
Online Resource
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