SECTORAL IMPLICATIONS OF FARM PROGRAM MODIFICATIONS

The overall and distributional effects of farm programs and selected r evisions are examined using a mathematical programming sector model. T he model incorporates market distortions caused by price supports, tar get prices, program participation, deficiency payments and marketing l oans. Current farm programs are found to increase producer prices, dep ress consumer prices, and in turn result in excess production and high er consumption and exports. Domestic and foreign consumers as well as domestic producers are subsidized by farm programs. Social deadweight loss occurs as government payments exceed welfare benefits received by consumers and producers. Society as a whole benefits from reductions in program provisions.