Determination of a Variable Price Support Schedule as Applied to Agricultural Production Control

Wen-Yuan Huang and Bengt Hyberg

Journal of Agricultural Economics Research, 1991, vol. 43, issue 3, 7

Abstract: Adoption of variable price support (VPS) schedules could be effective in controlling agricultural production and targeting program benefits to specific farm groups. The design of a VPS program would require determination of price schedules for farm-level production decisions that satisfy both farmer and program objectives. We applied a primal-dual mathematical programming model to the determination of a VPS program for production control of US corn, wheat, and soybeans. We show that government program costs under the VPS program would decline to $15 billion from $26.8 billion under a comparably scaled mandatory production control program. The program benefits to a 120-acre farm would increase 80 percent to $18,000 from $10,000 while the benefits to a 2,500-acre farm would fall 82 percent to $40,000.

Keywords: Production; Economics (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersja:138238

DOI: 10.22004/ag.econ.138238

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