The impact of policy design on payment concentration in Ad-hoc disaster Relief: Lessons from the Market Facilitation and Coronavirus food Assistance programs

Belasco, Eric J.; Smith, Vincent H.

doi:10.1016/j.foodpol.2021.102189

Cited by 9 publications

(5 citation statements)

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“…Although none of the farmers interviewed complained about the amount of their CFAP grant, nationwide, small and mid-sized farms (per farm revenue) receiving CFAP funds received a proportionately lesser amount of total funds than the larger farms (Belasco & Smith, 2022). Relatedly, we found that farmers who reported lower pre-COVID revenue compared to higher-revenue farms were less likely to participate in relief programs (Figure 3).…”

Section: Discussionmentioning

confidence: 77%

“…This greater number may reflect that the average farm size of the surveyed farmers was larger than that of the average PA farm (261 compared to 137 acres) and that farmers with higher revenues were overrepresented in the survey sample. As noted by Belasco and Smith (2022), these attributes increased the likelihood of receiving federal aid. The USDA-published qualification criteria for CFAP grants was production-specific based on the farmer reporting usual production and anticipated lost revenue due to the pandemic (USDA FSA, 2020; USDA Farmers.gov, n.d.-a; n.d.-b).…”

Section: Discussionmentioning

confidence: 94%

“…According to Hungerford et al (2021) and Orden (2021), CFAP's structure worked best for livestock and row crop farmers compared to specialty (fruit and vegetable) farmers. Moreover, because federal relief payments, including CFAP, are based on the farms' usual production levels, not acres planted, larger-revenue farms tend to receive the majority of federal subsidy payments as well as a higher payment proportionately than smaller farms (Belasco & Smith, 2022). Bekkerman et al Previous research on resilience and the food system (FAO, 2013;Hendrickson, 2015;Whitehouse et al, 2023) has encouraged focusing simultaneously on a) describing the agency and adaptability of smaller farmers who may be more flexible to respond to changes and b) understanding the ways that government agencies may intervene to maintain the overall structure of the food system.…”

Section: Introductionmentioning

confidence: 99%

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2023

J. Agric. Food Syst. Community Dev.

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Section: Discussionmentioning

confidence: 77%

Section: Discussionmentioning

confidence: 94%

Section: Introductionmentioning

confidence: 99%

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2023

J. Agric. Food Syst. Community Dev.

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“…For instance, US farm programs during our sample period were designed to be largely decoupled from production decisions and other factors that drive working capital levels. One such shock is the recent surge in ad hoc payments made to farmers between 2018 and 2020 through the Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) (Belasco & Smith, 2022; Janzen & Hendricks, 2020). With cash injections to working capital in the form of ad hoc payments, farmers may have been able to reduce their use of relatively expensive short‐term financing.…”

Section: Empirical Methodsmentioning

confidence: 99%

Commodity storage and the cost of capital: Evidence from Illinois grain farms

Janzen,

Paulson,

Tsay

2023

American J Agri Economics

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Commodity inventories are the key state variable determining the magnitude of commodity price responses to supply and demand shocks. Many firms in commodity supply chains use storage, but we know little about which firms and why. The economic theory of storage asserts that firms in a competitive market for inventories will store based on current and expected market prices and the per‐unit cost of storing. We empirically test at the firm‐level the importance of one major cost of storage: the opportunity cost of capital used to value foregone revenue from deferred commodity sales. To do so, we use panel data from thousands of Illinois farms who hold inventories of corn and soybeans. Although interest rates as a measure of capital costs are unlikely to vary widely across firms in this context, we exploit variation in the weighted average cost of capital due to cross‐firm differences in capital structure. Using two‐way fixed effects regressions, we find a statistically significant average effect of capital costs on inventory that masks notable heterogeneity across firms. Panel quantile regressions reveal two groups of firms: one whose inventory holdings are responsive to changes in the opportunity cost of storage and another whose are not. Our results suggest some farms behave like the profit‐maximizing ones from theory but substantial inframarginal commodity inventories are held by farms for other reasons.

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“…Alternatively, if nonrecipients observe their neighbors receiving a benefit from which they are excluded solely on the basis of occupation, the income transfers may generate negative impressions about the issuing executive among nonrecipients. Belasco and Smith (2021), for example, discuss that MFP and CFAP payments primarily went to a concentrated group of large farms.…”

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confidence: 99%

Political returns to ad hoc farm payments?

Janzen

Malone

Schaefer

et al. 2021

Applied Eco Perspectives Pol

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This paper investigates the extent to which ad hoc farm payments made under the Market Facilitation Program (MFP) and the Coronavirus Food Assistance Program (CFAP) affected voting patterns in the 2020 Presidential Election. MFP and CFAP payments were historically unique not only in terms of their magnitude, but also because they were authorized almost entirely by the incumbent Administration of President Donald Trump without direct Congressional authorization or appropriation. Our results indicate that these payments did influence county‐level voting outcomes. The observed response is driven almost exclusively by increased turnout among Trump supporters—we do not observe evidence that ad hoc payments generated widespread “vote switching” away from the Democratic or third‐party candidates and toward Trump. We find the MFP and CFAP programs generated 677,512 votes for Republican candidate Trump in the 2020 Presidential Election with an estimated cost‐per‐vote‐gained of $66,124. These votes induced by ad hoc farm payments were insufficient to change electoral college outcomes in any U.S. state.

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The impact of policy design on payment concentration in Ad-hoc disaster Relief: Lessons from the Market Facilitation and Coronavirus food Assistance programs

Cited by 9 publications

References 10 publications

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Untitled

Commodity storage and the cost of capital: Evidence from Illinois grain farms

Political returns to ad hoc farm payments?

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