The Effect of Changing Government Subsidy Programs: An Analysis of Revenue at the Farm Level

The expiration of the 2002 Farm Bill has presented an opportunity to renovate current farm policy into a program that better meets the demands faced by producers and other interested parties. During the farm bill debates on what to do with subsidy payments, the idea of structuring new programs that better fit a farmer?s needs is gaining momentum. These programs are often revenue based, adding to a more efficient program by combining yield and price risk. The intention of this thesis was to offer an overview of the potential effects of changes in farm programs on both the level and variability of farm revenue. The first step in accomplishing this objective was to create a model that accurately simulates farms from every producing county for which data were available. The proposals modeled include the National Corn Growers Association (NCGA), the USDA proposal, and a revenue subsidy wrapped-around an insurance program