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A Variable Price Support Farm Program: A Transition Tool to a Free Market

Published online by Cambridge University Press:  09 September 2016

Wen-Yuan Huang ,
Bengt Hyberg  and
Eduardo Segarra
Wen-Yuan Huang
Affiliation:
Economic Research Service, USDA
Bengt Hyberg
Affiliation:
Economic Research Service, USDA
Eduardo Segarra
Affiliation:
Department of Agricultural Economics, Texas Tech University
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Abstract

This paper analyzes a variable price support program (VPS) as an alternative to the current farm income support program. The VPS program can control U.S. agricultural production while protecting income of small farmers. The VPS is designed to alter farm level production decisions by reducing commodity support prices for each additional unit of production produced. This will serve to discourage excess aggregate production. The VPS program can be a mechanism to stabilize income of efficient small farms during the transition from the current farm programs to a free market environment. An illustrative study is used to target government program benefits to various farm-size groups.

Keywords

variable price supportproduction controlfarm program benefitfarm size
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 22 , Issue 1 , July 1990 , pp. 133 - 144
Copyright
Copyright © Southern Agricultural Economics Association 1990

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