The Effects of Increasing Flex Acres on Farm Planning and Profitability

Dynamic programming techniques were used to evaluate the effects of alternative levels of normal flex acreage requirements on a Midwestern corn-soybean farm and a Southeastern cotton farm. Results indicate that increasing normal flex acres from the current level of 15 percent to 35 percent would provide inducement for farmers in both regions to plant more soybeans. In general, the cotton farm incurs considerably higher expected losses from the change. Thus, there are unequal regional consequences of such a policy change. Farm programs have provided significant sources of income support for many crop farmers. In eight of the last ten years, the target price for com has exceeded the national average market price. In 1987, the year of the highest expenditures for this program, over $7 billion in program payments were given to U.S. com farms, an amount equal to over 50 percent of sales receipts. Over the period 1983–88, program payments averaged 36 percen