U.S. Farm Policy and the Volatility of Commodity Prices and Farm Revenue

Sergio Lence and Dermot Hayes

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: A dynamic three-commodity rational-expectations storage model is used to compare the impact of the Federal Agricultural Improvement and Reform (FAIR) Act of 1996 with a free-market policy, and with pre-FAIR policies. Results suggest that FAIR did not lead to significant increases in long-run price volatility or revenue volatility. The main impact of pre-FAIR, relative to the free-market regime, was to substitute government storage for private storage in a way that did little to support prices or to stabilize farm incomes. Results also indicate that U.S. grain market volatility in 1995-2000 was due to fundamental market forces and not to FAIR.

Date: 2002-05-01
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Published in American Journal of Agricultural Economics, May 2002, vol. 84 no. 2, pp. 335-351

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Related works:
Journal Article: U.S. Farm Policy and the Volatility of Commodity Prices and Farm Revenues (2002)
Working Paper: U.S. Farm Policy and the Volatility of Commodity Prices and Farm Revenues (2002)
Working Paper: U.S. FARM POLICY AND THE VARIABILITY OF COMMODITY PRICES AND FARM REVENUES (2000)
Working Paper: U.S. Farm Policy and the Variability of Commodity Prices and Farm Revenues (2000)
Working Paper: U.S. Farm Policy and the Variability of Commodity Prices and Farm Revenues (2000)
Working Paper: U.S. Farm Policy and the Variability of Commodity Prices and Farm Revenues (2000)
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