Farm-level data for the years 2002 and 2003 were used to examine acreage decisions of Corn Belt producers. An evaluation of survey questions that elicited information about the factors that influence farm operators' acreage decisions as well as their allocation of fixed payment receipts among farm and nonfarm uses was also conducted. It was found that any effects of direct payments of acreate are likely to be modest. However, inconsistencies in the survey responses arise in some cases. In particular, farmers report that the largest share of direct payment receipts tend to be used to cover agricultural production costs. Overall, results suggest that farmers who previously were unable to adjust production due to credit constraints are able to move to more optimal means of production after receiving the payments.
ASJC Scopus subject areas
- Agricultural and Biological Sciences (miscellaneous)
- Economics and Econometrics