“Decoupled” Farm Program Payments are Really Decoupled: The Theory

Robert G. Chambers and Daniel C. Voica

American Journal of Agricultural Economics, 2017, vol. 99, issue 3, 773-782

Abstract: Lump-sum transfers to farmers are commonly believed to affect the production choices of farmers in the presence of risk and uncertainty. This paper shows that if farmers have off-farm investment and employment opportunities, production decisions are decoupled from lump-sum subsidies in the presence of risk and uncertainty. Our results are reconciled with existing results by showing that previously identified production adjustments are portfolio adjustments.

Keywords: Decoupling; uncertainty; producers; portfolio analysis (search for similar items in EconPapers)
JEL-codes: D21 D81 D92 G11 H22 Q12 Q14 Q18 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://hdl.handle.net/10.1093/ajae/aaw044 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:99:y:2017:i:3:p:773-782.

Access Statistics for this article

American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu

More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().