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Providing Crop Disaster Assistance through a Modified Deficiency Payment Program
Author(s) -
Miranda Mario J.,
Glauber Joseph W.
Publication year - 1991
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242451
Subject(s) - revenue , payment , business , moral hazard , crop insurance , government (linguistics) , direct payments , income support , agricultural economics , finance , agriculture , economics , incentive , geography , linguistics , philosophy , archaeology , microeconomics , macroeconomics
Federal income support programs provide producers with only a limited degree of income protection in the event of a widespread crop failure. As an alternative to supplemental disaster assistance, we propose a modification of the deficiency payments program in which a producer's payment would be based on the difference between a target revenue and the average revenue in the producer's region. A regional target revenue progam would provide improved individual income protection without promoting moral hazard and would limit regional revenue shortfalls, thereby eliminating the demand for supplemental disaster assistance and reducing government costs.