ACREAGE RESPONSE TO GOVERNMENT STABILIZATION PROGRAMS IN ONTARIO

This study assesses the impact of government support programs on acrea ge response in white beans, com, soybeans and winter wheat in Ontario. The empirical model, developed from a theoretical supply response mod el wider uncertainty from utility maximization principles, incorporate s the truncation effects of government support programs on the expecta tion and variance of crop revenues. The findings indicate that the Nat ional Tripartite Stabilization Program dramatically boosted the level of white bean production while the Agricultural Stabilization Act incr eased com plantings at the expense of a portfolio of alternatives. The Gross Revenue Insurance Program, which provides a consistent measure of support to all crops, provided the least potential for misallocatio n of land among crops. The production-neutrality objectives of all pro grams appear to have been violated, since the measure of protection gi ven to riskier crops is higher than that given to less risky crops, ev en though both groups receive the same level of support.