Loan Deficiency Payments or the Loan Program?

Dermot Hayes and Bruce Babcock

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: Low marked prices for corn and soybeans have triggered two federal price support programs: (1) a Loan Deficiency Payment (LDP) that pays producers the difference between county-level prices and that county's loan rate on a date chosen by the producer and (2) a traditional loan program whereby the producer puts grain in storage and uses the grain as collateral on a loan. Producers may enroll in either program, but not in both. Therefore, the authors discuss three choices using existing information to suggest which choice is likely to be the best response.

Date: 1998-09
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Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:98-bp19

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