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

Barry K. Goodwin; Ashok K. Mishra

doi:10.1111/j.1467-8276.2006.00839.x

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

Barry K. Goodwin, Ashok K. Mishra

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128 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 language	English (US)
Pages (from-to)	73-89
Number of pages	17
Journal	American Journal of Agricultural Economics
Volume	88
Issue number	1
DOIs	https://doi.org/10.1111/j.1467-8276.2006.00839.x
State	Published - Feb 2006
Externally published	Yes

Keywords

Acreage response
Decoupled payments
WTO green box

ASJC Scopus subject areas

Agricultural and Biological Sciences (miscellaneous)
Economics and Econometrics

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10.1111/j.1467-8276.2006.00839.x

Cite this

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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.",

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note = "Funding Information: A portion of this work was done while Goodwin was at the Ohio State University. This research was supported by the North Carolina Agricultural Research Service, the OSU-OARDC, the An-dersons{\textquoteright} Endowment, and the OECD. We benefited significantly fromthehelpfulcommentsofJes{\'u}sAnt{\'o}n,HarryDeGorter,Bruce Gardner, Matt Holt, Jeffrey Hopkins, Teresa Serra, Paul West-cott, Ed Young, Carl Zulauf, and an anonymous referee. We gratefully acknowledge the helpful comments of seminar participants at the University of Arizona, Hebrew University of Jerusalem, and Oregon State University. Views, opinions, and conclusions are the authors{\textquoteright} alone and do not reflect those of the USDA or other organizations.",

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doi = "10.1111/j.1467-8276.2006.00839.x",

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AU - Goodwin, Barry K.

AU - Mishra, Ashok K.

N1 - Funding Information: A portion of this work was done while Goodwin was at the Ohio State University. This research was supported by the North Carolina Agricultural Research Service, the OSU-OARDC, the An-dersons’ Endowment, and the OECD. We benefited significantly fromthehelpfulcommentsofJesúsAntón,HarryDeGorter,Bruce Gardner, Matt Holt, Jeffrey Hopkins, Teresa Serra, Paul West-cott, Ed Young, Carl Zulauf, and an anonymous referee. We gratefully acknowledge the helpful comments of seminar participants at the University of Arizona, Hebrew University of Jerusalem, and Oregon State University. Views, opinions, and conclusions are the authors’ alone and do not reflect those of the USDA or other organizations.

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N2 - 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.

AB - 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.

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KW - Decoupled payments

KW - WTO green box

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

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Keywords

ASJC Scopus subject areas

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