TY - JOUR
T1 - Assessing participation in the milk income loss contract program and its impact on milk production
AU - D'Antoni, Jeremy M.
AU - Mishra, Ashok K.
AU - Blayney, Donald
N1 - Funding Information:
The views expressed here are not necessarily those of the Economic Research Service or the U.S. Department of Agriculture. This project was supported by the USDA Cooperative State Research Education & Extension Service, Hatch Project # 0212495 and Louisiana State University Experiment Station project # LAB 93872.
PY - 2013/3
Y1 - 2013/3
N2 - The Milk Income Loss Contract (MILC) program, a counter-cyclical income support program, was designed to provide price support to dairy farmers. Since the inception of the MILC program, large dairy producers have expressed concerns that the MILC payments have negatively affected their farming income. They argue that the program is not only inefficient but rewards inefficiency by keeping small, high-cost dairy farms in business. Using farm-level ARMS data from 2005, this study investigated the factors that affect farmers' decisions to participate in the MILC program and if participation in MILC has an impact on milk production. The results show that participation in the MILC program is positively correlated with farmers' educational attainment, organic certification subsidy, milk price, off-farm work by spouses, and financial record keeping. Further, medium-sized dairy farms are more likely to participate in MILC program. Finally, results indicate that participation in MILC program has a positive impact on milk production.
AB - The Milk Income Loss Contract (MILC) program, a counter-cyclical income support program, was designed to provide price support to dairy farmers. Since the inception of the MILC program, large dairy producers have expressed concerns that the MILC payments have negatively affected their farming income. They argue that the program is not only inefficient but rewards inefficiency by keeping small, high-cost dairy farms in business. Using farm-level ARMS data from 2005, this study investigated the factors that affect farmers' decisions to participate in the MILC program and if participation in MILC has an impact on milk production. The results show that participation in the MILC program is positively correlated with farmers' educational attainment, organic certification subsidy, milk price, off-farm work by spouses, and financial record keeping. Further, medium-sized dairy farms are more likely to participate in MILC program. Finally, results indicate that participation in MILC program has a positive impact on milk production.
KW - Agricultural policy
KW - Dairy farms
KW - Milk Income Loss Contract Program
KW - Two-step probit estimation
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U2 - 10.1016/j.jpolmod.2012.04.004
DO - 10.1016/j.jpolmod.2012.04.004
M3 - Article
AN - SCOPUS:84875250370
SN - 0161-8938
VL - 35
SP - 243
EP - 254
JO - Journal of Policy Modeling
JF - Journal of Policy Modeling
IS - 2
ER -