An assessment of the equitability of farm program payments

With increased pressures on today’s Federal Budget, there may be funding cutson agriculture programs. These cuts would certainly bring about increased concern as towhich programs and which crops take the biggest cut. A straight cut across the boardwill likely affect each commodity group uniquely, thus creating a need to evaluate thecurrent distribution of funding and the relative benefits associated with this distribution.The equitable distribution of farm program payments has been an ongoingconcern and publications have been written attempting to answer the question of whichcommodity is receiving more than their “fair share.” This thesis will use the measuresused in prior publications that have been updated to reflect current farm bill visions.Additionally, this research uses a consistent data set over a long enough time period sothat comparisons between program crops can be made.Equitability in relation to farm program payments is extremely difficult tomeasure as there are so many different factors to take into consideration. Thus, it wouldbe expected that the answer does not resolve itself with one ratio. Ultimately, the resultsof this research show that depending upon which tool you choose, the relative levels of support may change. For example, rice receives the most support per pound of programproduction on average, relative to the other eight crops, yet receives the second lowestlevel of target price relative to total variable costs. The underlying causes for thisvariability of results are described in the research though investigation of trends in themarket prices for these specific crops and the understanding of what each ratio isactually measuring.By reviewing the results, a clearer picture of which crops are getting greatestsupport begins to emerge, yet the outcome is still subject to much debate as there is nosingle “tell-all” ratio. The whole picture needs to be taken into consideration. Thisresearch provides a reference and attempts to present the whole picture, providing aconsistent and complete reference for policy makers to refer to as this debate increases.