1,207 research outputs found

    Decoupling farm policies: how does this affect production?

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    This paper studies the extent to which decoupled income support measures in agriculture can have production implications both at the extensive and intensive margins. We develop a theoretical framework that analyzes production responses of agricultural producers to apparently decoupled payments, by explicitly considering risk attitudes and uncertainty. We use farm-level data collected in Kansas to estimate the model. Technology and risk preference parameters are jointly estimated. Results show that though lump sum payments are not fully decoupled in the presence of risk and uncertainty, their effects on agricultural production are likely to be of a very small magnitude.Agricultural and Food Policy,

    Effects of Decoupling on the Average and the Variability of Output

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    Previous research has ignored the influence of inputs on output risk when assessing the effects of decoupled income-support payments on production decisions. This paper studies the impacts of agricultural policy decoupling on output variability and mean by explicitly considering the influence of agricultural input use on the stochastic component of production. We develop a theoretical framework that studies production responses of agricultural producers to apparently decoupled payments. Results show that, under DARA preferences, government transfers will have the effect of increasing production risk. Inferences on the effects of payments on output mean are also made. In our empirical application we use farm-level data collected in Kansas to illustrate the model.decoupling, output risk, risk preferences, Just-Pope production function, Demand and Price Analysis, Q12, Q18,
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