Are "Decoupled" Farm Program Payments Really Decoupled? An Empirical Evaluation |
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| Authors: | Barry K Goodwin Ashok K Mishra |
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| Institution: | Barry K. Goodwin is William Neal Reynolds Professor in the Departments of Agricultural and Resource Economics and Economics at North Carolina State University. Ashok K. Mishra is an economist with the Economic Research Service. |
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| Abstract: | This analysis utilizes farm-level data to evaluate the extent to which U.S. farm program benefits, particularly direct payments, bring about distortions in production. The issue is important in WTO negotiations and in the debate over the distortionary effects of decoupled ("green-box") payments. Our results suggest that the distortions brought about by AMTA payments, though statistically significant in some cases, are very modest. Larger effects are implied for market loss assistance payments. Probit models suggest that AMTA payments do not influence the likelihood that agents will acquire more land. Our results are reinforced using an aggregate county-level acreage model. |
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| Keywords: | acreage response decoupled payments WTO green box |
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