The economic value of farm program base

Mixed integer programming and dynamic programming models were used to obtain the implicit economic value of the initial endowment of base acreage on a cotton farm. While low levels of initial base have almost no impact on land value, high levels can be worth a considerable premium, with the implicit...

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Bibliographic Details
Published in:Land economics 1994-08, Vol.70 (3), p.318-329
Main Authors: Duffy, P.A, Taylor, C.R, Cain, D.L, Young, G.J
Format: Article
Language:English
Subjects:
ACREAGE
Agricultural land
AGRICULTURAL POLICIES
Agricultural policy
ALGODON
Assets
Cash crops
COTON
COTTON
Cotton production
Crop economics
CROPS
CULTIVOS
DYNAMIC MODELS
Dynamic programming
Economic models
Economic theory
Economic value
Economics
Endowment
Endowments
EXPLOITATION AGRICOLE
EXPLOTACIONES AGRARIAS
FARM AREA
Farm economics
Farming
FARMS
FEDERAL PROGRAMS
INTEGER PROGRAMMING
LAND
Land economics
METHODE D'OPTIMISATION
METODOS DE OPTIMIZACION
MODELE DYNAMIQUE
MODELOS DINAMICOS
OPTIMIZATION METHODS
PLANTE DE CULTURE
Planting
POLITICA AGRICOLA
POLITIQUE AGRICOLE
PRECIOS
PRICES
PRIX
Programming
Rural land use
Soybeans
Studies
SUPERFICIE DE LA EXPLOTACION
SURFACE D'EXPLOITATION
TERRE
TIERRAS
U.S.A
Valuation
Value
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Summary:Mixed integer programming and dynamic programming models were used to obtain the implicit economic value of the initial endowment of base acreage on a cotton farm. While low levels of initial base have almost no impact on land value, high levels can be worth a considerable premium, with the implicit value of additional initial base endowment increasing at an increasing rate. This pattern of increasing implicit value can be explained by provisions of the farm program allowing base to be created by a landowner who develops a planting history in a program commodity.
ISSN:0023-7639
1543-8325
DOI:10.2307/3146532