IMPACTS OF THE FEDERAL AGRICULTURAL IMPROVEMENT AND REFORM ACT OF 1996 (FAIR ACT) ON THE NORTH DAKOTA AGRICULTURAL ECONOMY

Won W. Koo, Marvin R. Duncan, Richard D. Taylor and Dwight G. Aakre

No 23150, Agricultural Economics Reports from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: The Federal Agriculture Improvement and Reform Act of 1996 (FAIR Act) decouples government farm subsidy payments from both price and production and provides farmers with nearly complete planting flexibility. Government spending under this act will be limited to $35.63 billion for 1996-2002 period. The net farm income for all six representative farms under the 1996 FAIR Act is projected to be higher than under the 1990 farm act early in the forecast period and lower after 1999 under the 1996 FAIR Act. Cropland prices are projected to fall 19.8% between 1996 and 2002 under the 1996 FAIR Act, while cropland prices are projected to fall 18.5% under the 1990 farm act. Cash rental rates are projected to follow cropland prices. Debt-to-asset ratios for most farms, although rising across the forecast period, do not reach levels that imperil credit- worthiness, but in the case of the low profit farm and small size farm the debt-to-asset ratios rise to a level that may imperil credit-worthiness on new borrowing.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 33
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaer:23150

DOI: 10.22004/ag.econ.23150

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