Impact of the Fruit and Vegetable Planting Restriction on Crop Allocation in the United States

Abstract

WP 2012-14 November 2012JEL Classification Codes: Q13; Q18Eligibility requirements for farm payments include restrictions from planting certain horticultural crops on base acres, and there has been pressure to remove such restrictions in recent Farm Bill discussions and as part of World Trade Organization negotiations. We measure the effects of the planting restriction on acres planted to horticultural and program crops using U.S. county-level data from the Censuses of Agriculture taken before and after the initial policy was introduced in 1990 using a difference-in-difference estimator. Our results indicate that the planting restriction has crowded out fruit and vegetable acreage nationally and most notably in selected Sunbelt states, a region that specializes in horticultural crop production