Date of Graduation

8-2019

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor/Mentor

Durand-Morat, Alvaro

Committee Member

Halbrook, Steve A.

Second Committee Member

Nalley, Lawton L.

Third Committee Member

Wailes, Eric J.

Keywords

Agricultral Policy; Commodity programs; Crop Insurance; Farm Bill; Farm Income Supplementation; Farm Safety Net; Federal Crop Insurance Policies; Representative Farm; Simulation

Abstract

For over a century, the American agricultural industry has relied on federal government support to aid in the maintenance and expansion of farming operations. Since 1933, a series of 18 farm bills have shaped agricultural policy into what is commonly known as the agricultural safety net. The 2018 farm bill was passed on December 20, 2018 and is the most recent update of the agricultural safety net. Commodity programs and federal crop insurance are two key components of today’s agricultural safety net, and many times, these programs may be the difference between a net loss and a positive net income for many producers. The objective of this study is to examine the safety net as it is designed in the 2018 farm bill, and assess its contribution to the economic viability of Arkansas farms. Using a set of representative Arkansas farms, this study simulates the production and financial characteristics of these farms over the life of the 2018 farm bill to quantify the effects of commodity program payments and crop insurance payments on overall financial health. The projected farm models generate large government support payments in all five-year life of the 2018 farm bill (2019-2023) leading to more financially sustainable farm performance across all five farms.

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