Charles B. Moss, Ashok K. Mishra, and Tyler Mark

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Presentation transcript:

Charles B. Moss, Ashok K. Mishra, and Tyler Mark Impact of Farm Program Payments on Biofuel Sector: Implications for Structural Change Charles B. Moss, Ashok K. Mishra, and Tyler Mark

Introduction Coals to Newcastle – Review of agricultural policy regimes. Before the Brennan Plan Crop allotments Post Brennan Plan Target Price/Deficiency Payments Commodity Credit Corporation Program Base Acres FAIR 1996 AMTAPs or PFC LDP Reduced the linkage to base acres

FSRI Maintained several features of the FAIR with respect to base acres FCE Continued the FSRI

p1y1+p2y2+p3y3-wx-l[f(y,x,a)] p1f(x1)a1+p2f(x2)a2+p3f(x3)a3-wx+m(aT-a1-a2-a3) (p1+t1 )f(x1)a1+p2f(x2)a2+p3f(x3)a3-wx+m(aT-a1-a2-a3)+k(a1*-a1) [(p1+t1 )f(x1)-w]=[p2f(x2)-w]=[p3f(x3)a3-w]=m a1*>a1

Change in Southern Agriculture Corn Price Corn and Fuel Prices Sugar -0.0013 -0.0053 Cotton 0.0146 -0.0016 Corn 0.1017 0.1031 Other Crop 0.0161 0.0109 Livestock -0.0116 -0.0482 Seeds 0.0062 0.0008 Fertilizer 0.0167 0.0269 Pesticides 0.0046 0.0084 Fuel 0.0013 -0.0139 Labor 0.0113 0.0055