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Commodity Policy, Price Incentives, and the Growth in Per-Acre Yields

Published online by Cambridge University Press:  28 April 2015

William E. Foster  and
Bruce A. Babcock
William E. Foster
Affiliation:
North Carolina State University, Raleigh, North Carolina
Bruce A. Babcock
Affiliation:
Iowa State University, Ames, Iowa
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Abstract

We estimate the influence of policy-induced price changes and of technology supply on North Carolina flue-cured tobacco yields. The decline in land rent and effective output price that accompanied a 1965 policy change from acreage allotments to poundage quotas caused a 12 percent decrease in yields. Farmer yields were more responsive to yield-increasing technologies under acreage allotments than under poundage quotas. Annual yield growth was 0.5 percent under poundage quotas and 4.32 percent under acreage allotments. The growth rate decline is attributable to changes in relative prices and to a slowdown in the supply of available technologies.

Keywords

commodity policyendogenous yield growthflue-cured tobaccotechnical change
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 25 , Issue 1 , July 1993 , pp. 253 - 265
Copyright
Copyright © Southern Agricultural Economics Association 1993

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