Abstract
The recent infusion of cash into production agriculture due to damages from retaliatory trade actions has been large. Up to $28 billion has been authorized through the Trade Mitigation Program in 2018 and 2019, accounting for a significant share of farm income and providing liquidity in an extended period of low prices. Using farm-level data from Illinois, Kansas, and Minnesota, this research examines the importance of market facilitation program payments in supporting incomes and reducing credit default risk. Results illustrate the additional liquidity provided for farms, and the distributional effects across states and among farms within each state.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 227-244 |
| Number of pages | 18 |
| Journal | Applied Economic Perspectives and Policy |
| Volume | 42 |
| Issue number | 2 |
| DOIs | |
| State | Published - Jun 1 2020 |
Bibliographical note
Funding Information:The authors would like to acknowledge the Illinois Farm Business Farm Management Association, the Kansas Farm Management Association, the Southwest Minnesota Farm Business Management Association, and the Minnesota State Colleges and University System Farm Business Management program for allowing the authors access to the data utilized for this research.
Funding Information:
To examine MFP payments and their relationship to the financial health of Illinois, Kansas, and Minnesota farms, this research uses farm‐level accrual balance sheet and income statement data from the Illinois Farm Business Farm Management association (FBFM 2019), the Kansas Farm Management Association (KFMA 2019), the Southwest Minnesota Farm Business Management Association (SWMFBMA 2019), and the Minnesota State Colleges and University System Farm Business Management program (MNFBM 2019).
Publisher Copyright:
© 2020 Agricultural and Applied Economics Association
Keywords
- Agricultural credit risk
- Farm financial position
- Farm income
- Market facilitation program
- Probability of default
