Submission Title

The Effect of Government Agricultural Support Payments on Farmland Rental Prices

Location

Jereld R. Nicholson Library

Subject Area

Economics

Description

The goal of this study was to explain the effect of government agricultural support payments on farmland rental prices. The regression specified farmland rental prices as a function of farm income (net of government payments received), and direct government agricultural support payments. The regression was estimated using seemingly unrelated regression for the years 2002, 2007, and 2012. Our results show the effect of government agricultural support payments on farmland rental prices was significant in 2002, then became insignificant for 2007 and 2012. We conclude the waning significance was caused by a change in the format of government support payments from a known value, activity-based payment, to a variable value, insurance payment.

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The Effect of Government Agricultural Support Payments on Farmland Rental Prices

Jereld R. Nicholson Library

The goal of this study was to explain the effect of government agricultural support payments on farmland rental prices. The regression specified farmland rental prices as a function of farm income (net of government payments received), and direct government agricultural support payments. The regression was estimated using seemingly unrelated regression for the years 2002, 2007, and 2012. Our results show the effect of government agricultural support payments on farmland rental prices was significant in 2002, then became insignificant for 2007 and 2012. We conclude the waning significance was caused by a change in the format of government support payments from a known value, activity-based payment, to a variable value, insurance payment.