Economic Perceptions and Agricultural Policy Preferences

Previous research indicates that policy perceptions are important in explaining individual preferences for government expenditures. In this article we study agricultural policy preferences using national survey data containing several policy perception measurements. A model linking preferences to perceptions through an underlying unobservable variable is estimated and assessed using the bootstrap. The perception that farmers receive too much government assistance is dominant, affecting preferences negatively. Perceptions concerning the importance of agriculture to the economy, financial stress and profitability, and farming as an occupation are also important. Some selective preference for family farm support is indicated with implications for efforts to promote such support. Key words: bootstrap method, reduced-rank regression. During the 1980s, the U.S. agricultural sector underwent an economic crisis to a degree not experienced since the Great Depression. The sector was plagued by record levels of debt, rapidly declining asset values, and an accel-erated rate of farm failures (Melichar). An ex-tensive literature examines the causes, conse-quences, and policy implications of this event (e.g., Murdock and Leistritz; McKinzie, Baker, and Tyner). While there is general agreement that policies should be designed to ease the burden of transition to a more efficient sector, substantial disagreement on the nature of spe-cific policies remains (Dobson; Calomiris, Hubbard, and Stock). The cost of U.S. farm programs rose rapidly in the mid-eighties, and although the cost has fallen in recent years, much of the structure of the farm programs remains unchanged. Since protective measures represent significant costs to consumers and taxpayers, it is of interest to examine public support for the programs. While surveys indicate public support for pol-Jayachandran N. Variyam is a postdoctoral associate in the De