Explaining State Bans on Corporate Farming

Charles R Knoeber

Economic Inquiry, 1997, vol. 35, issue 1, 151-66

Abstract: State laws banning corporate farming present a puzzle for a rent-seeking explanation of political outcomes since family farmer proponents may receive no direct benefit from these bans. An explanation, developed here, is that these farmers benefit indirectly. Forestalling corporate entry preserves the farm political coalition structured around those cooperatives patronized by family farmers and so indirectly preserves federal subsidies and supply restrictions. That the incidence of state bans is positively related to the importance of federal farm programs, the importance of cooperatives, and the homogeneity of farmers within a state is consistent with this indirect rent-seeking explanation. Copyright 1997 by Oxford University Press.

Date: 1997
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