TY - JOUR
T1 - Determinants of dairy farmers' participation in the Milk Income Loss Contract program
AU - D'Antoni, J.
AU - Mishra, A. K.
N1 - Funding Information:
The views expressed here are not necessarily those of the Economic Research Service or the US 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 - 2012/1
Y1 - 2012/1
N2 - The Milk Income Loss Contract (MILC) program is a counter-cyclical income support program that was designed to provide price support to dairy farmers. Since inception of MILC, it has been argued that the program is inefficient and rewards inefficiency by keeping high-cost, small dairy farms in business. Using farm-level data and the probit estimation method, we investigated the factors that affect a farmer's decision to participate in the MILC program. Participation in the MILC program was positively correlated with the farmer's educational attainment, participation in the organic certification cost share subsidy program, off-farm work by spouses, and financial recordkeeping. Consistent with theory, participation in the MILC program is negatively correlated with the price of milk. Finally, contrary to the established narrative of large dairy producers, medium-sized dairy farms are more likely than large farms to participate in the MILC program.
AB - The Milk Income Loss Contract (MILC) program is a counter-cyclical income support program that was designed to provide price support to dairy farmers. Since inception of MILC, it has been argued that the program is inefficient and rewards inefficiency by keeping high-cost, small dairy farms in business. Using farm-level data and the probit estimation method, we investigated the factors that affect a farmer's decision to participate in the MILC program. Participation in the MILC program was positively correlated with the farmer's educational attainment, participation in the organic certification cost share subsidy program, off-farm work by spouses, and financial recordkeeping. Consistent with theory, participation in the MILC program is negatively correlated with the price of milk. Finally, contrary to the established narrative of large dairy producers, medium-sized dairy farms are more likely than large farms to participate in the MILC program.
KW - Farm size
KW - Financial recordkeeping
KW - Milk income loss contract (MILC) payments
KW - Organic certification subsidy
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U2 - 10.3168/jds.2011-4542
DO - 10.3168/jds.2011-4542
M3 - Article
C2 - 22192228
AN - SCOPUS:84055184062
VL - 95
SP - 476
EP - 483
JO - Journal of Dairy Science
JF - Journal of Dairy Science
SN - 0022-0302
IS - 1
ER -