THE 2002 U.S. FARM ACT: IMPLICATIONS OF BASE UPDATING

Paul Westcott (), David W. Skully, Chester Young and Linwood Hoffman

No 20197, 2004 Annual meeting, August 1-4, Denver, CO from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The 2002 Farm Act allowed farm owners to update base acres for direct payments (DPs) and counter-cyclical payments (CCPs) and to update yields for counter-cyclical payments. A minority, about 40 percent, of the 1.9 million enrolled farms choose to update their base acres using 1998-2001 plantings; of these updating farms about three-fourths updated their payment yield for CCPs. Producers with rice and cotton base had a strong economic incentive to maximize base acres for those crops, either by retaining previous base acres if they had shifted to production of alternative crops or by increasing base if they had expanded rice or cotton plantings. Research findings support the hypothesis that base designation reflects payment maximization criteria.

Keywords: Farm; Management (search for similar items in EconPapers)
Pages: 22
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea04:20197

DOI: 10.22004/ag.econ.20197

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