U.S. Farm Policy and the Volatility of Commodity Prices and Farm Revenues
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. Copyright 2002, Oxford University Press.
Year of publication: |
2002
|
---|---|
Authors: | Lence, Sergio H. ; Hayes, Dermot J. |
Published in: |
American Journal of Agricultural Economics. - Agricultural and Applied Economics Association - AAEA. - Vol. 84.2002, 2, p. 335-351
|
Publisher: |
Agricultural and Applied Economics Association - AAEA |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
OPTION PRICING ON RENEWABLE COMMODITY MARKETS
Lence, Sergio H., (2002)
-
Option Pricing on Renewable Commodity Markets
Jin, Na, (2010)
-
Welfare Impacts of Cross-Country Spillovers in Agricultural Research
Lence, Sergio H., (2008)
- More ...