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Estimating The Value of the 0/92 Reduced Planting Alternatives of the 1985 Farm Bill For Farm Program Participants

Published online by Cambridge University Press:  09 September 2016

Troy N. Thompson ,
Thomas O. Knight  and
Billy D. Boren
Troy N. Thompson
Affiliation:
Department of Agricultural Economics, Texas A&M University
Thomas O. Knight
Affiliation:
Department of Agricultural Economics, Texas A&M University
Billy D. Boren
Affiliation:
Department of Agricultural Economics, Texas A&M University
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Abstract

The 50/92 and 0/92reduced planting alternativestives of the 1985 farm bill allow farm program participants more flexibility in making production decisions. Specifically, these provisions relax the incentive to produce inherent in earlier commodity programs that linked deficiency payments directly to harvested acreage. This study examined the value of this additional decision flexibility for crop producers in the Blacklands of Central Texas. The results suggest that the reduced planting alternatives would not be used by, and have no value for risk neutral producers, but have substantial value for risk averse producers who would reduce planted acreage in years when yield expectations are low.

Keywords

decision treedecouplingfarm billrisk analysis
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 22 , Issue 2 , December 1990 , pp. 87 - 97
Copyright
Copyright © Southern Agricultural Economics Association 1990

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