The economic value of farm program base

• Published in: Land economics Vol. 70; no. 3; pp. 318 - 329
• Main Authors: Duffy, P.A, Taylor, C.R, Cain, D.L, Young, G.J
• Format: Journal Article
• Language: English
• Published: Chicago University of Wisconsin Press 01-08-1994
• 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; United States > US
• ISSN: 0023-7639; 1543-8325
• DOI: 10.2307/3146532

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.