Number: RL34053
Title: Measuring Equity in Farm Support Levels
Authors: Jasper Womach and Randy Schnepf, Resources, Science, and Industry Division 
Abstract: Federal farm law mandates support for, among others, 18 "covered commodities." Support for these agricultural commodities, as specified in the 2002 farm bill (P.L. 107-171) includes direct payments, counter-cyclical payments, and marketing loans. Large disparities in the relative levels of benefit among these commodities have led to questions of equity. This report compares support rates per unit, total payments, payments per harvested acre, payments as a share of the value of production, and payments as a share of the total cost of production. In addition, price and income support levels are compared to market prices. By all of these measures there has been little equity across commodities. However, farmers often have argued for equity based on cost of production. Economists, on the other hand, would use trend market prices as the basis for setting support prices in order to avoid market distortions and resource misallocations.
Pages: 15
Date: June 22, 2007