Are "decoupled" farm program payments really decoupled? An empirical evaluation

Barry K. Goodwin, Ashok K. Mishra

Research output: Contribution to journalArticle

103 Scopus citations

Abstract

This analysis utilizes farm-level data to evaluate the extent to which U.S. farm program benefits, particularly direct payments, bring about distortions in production. The issue is important in WTO negotiations and in the debate over the distortionary effects of decoupled ("green-box") payments. Our results suggest that the distortions brought about by AMTA payments, though statistically significant in some cases, are very modest. Larger effects are implied for market loss assistance payments. Probit models suggest that AMTA payments do not influence the likelihood that agents will acquire more land. Our results are reinforced using an aggregate county-level acreage model.

Original languageEnglish (US)
Pages (from-to)73-89
Number of pages17
JournalAmerican Journal of Agricultural Economics
Volume88
Issue number1
DOIs
StatePublished - Feb 1 2006
Externally publishedYes

Keywords

  • Acreage response
  • Decoupled payments
  • WTO green box

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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