ECONOMIC CONSEQUENCES OF FEDERAL FARM COMMODITY PROGRAMS, 1953-72

Farm programs of the Federal Government kept farm prices and incomes higher than they otherwise would have been in 1953-65, thereby providing economic incentives to growth in output sufficient to keep farm prices lower than otherwise during 1968-72. The latter result differs significantly from findings in other historical free market studies. These conclusions stem from an analysis of the programs in which a two-sector (crops and livestock) econometric model was used to simulate historical and free-market production, price, and resource adjustments in U.S. agriculture. Supplies are affected by risk and uncertainty in the model, and farm technological change is endogenous