Economic Effects of Mandatory Production Controls

Chester Young, Brent T. Hyberg, J. Michael Price, Wen-Yuan Huang, Chinkook Lee, Jerry L. Sharples and Dan Dvoskin

No 308047, Agricultural Economic Reports from United States Department of Agriculture, Economic Research Service

Abstract: Mandatory restrictions on agricultural production continue to be advocated as an alternative policy for increasing farm income while reducing farm program costs. Although farm income might rise in the short run, such programs would be costly to consumers and possibly to the Federal Treasury. An export subsidy would be needed to maintain current agricultural export levels if a mandatory production control program were used to raise prices. The cost of such a subsidy could exceed savings from eliminating Government income support programs. The program would affect agribusinesses by reducing the need for farm supplies and by reducing the amount of product handled beyond the farm gate. More generally, programs that idle productive resources to maintain higher prices may lead to production inefficiencies and to capitalization of program benefits that are captured by current landowners.

Keywords: Agricultural and Food Policy; International Relations/Trade; Marketing; Production Economics (search for similar items in EconPapers)
Pages: 33
Date: 1989-03
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerser:308047

DOI: 10.22004/ag.econ.308047

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