Theses and Dissertations at Montana State University (MSU)
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Item Accounting for federal dairy program expenditures : a macroeconomic approach(Montana State University - Bozeman, College of Agriculture, 1988) Suydam, Stacey Lynn; Chairperson, Graduate Committee: Ann L. Adair.Dairy products account for 13 percent of the total cash receipts from all farm commodities. In addition, fluid milk and dairy products represent about 15 percent of consumer expenditures for food. The U.S. dairy industry is subjected to more federal government regulation than any other agricultural industry and therefore, is highly affected by farm policy decisions. Although many studies have evaluated the effects of government intervention in the dairy sector, none have done so in a fully simultaneous, general equilibrium context. The objective of this study is to specify equations which capture the interaction between the government sector and the dairy sector. The equations needed to account for the direct and indirect linkages between the U.S. dairy sector and the federal government sector were specified according to economic theory and then estimated using the ordinary least squares estimation procedure. The estimated equations were then validated by simulating outside of the sample period and examining the root-mean-square percent error. In order to simulate the dairy sector model in a general equilibriun context, the equations were endogenized into an existing macroeconometric model (COMGEM). This provides a framework which allows the analysis of the impacts of changes in various policy variables on the dairy and government sectors, as well as the general economy. The study examines the effects of specifying the price support for milk an additional 25 cents per cwt lower than the levels established in the 1985 farm bill for 1988 and 1989. The analysis implies .that additional reductions in the price support for milk are needed in order to bring the current production/consumption imbalance back into line. The small reduction in this component of the farm program did not significantly affect macroeconomic level variables, but did reduce federal expenditures on the dairy program without significantly reducing net farm income. Alternative policy scenarios can be evaluated using this framework to assess the potential impacts of proposed policy changes on the farm sector and the cost to taxpayers of implementing the changes.Item The difficulty in identifying a subsidy in the use of a natural resource : Canadian lumber imports(Montana State University - Bozeman, College of Agriculture, 1989) Harkleroad, Brian Craig; Chairperson, Graduate Committee: Ronald N. Johnson.Canadian stumpage price subsidies are claimed to be the cause of injury to the U.S. lumber industry. Legislative action has been taken which will impose a 15% export tax on Canadian lumber. This study examines the difficulty of identifying such a subsidy in the case of Canadian lumber imports, and more importantly, the difficulty of identifying subsidies in the use of natural resources as a whole. This is done through examination of resource depletion in the theory of the mine and the steady state timber management system. A model of the Canadian lumber market is then proposed. Examination of this model rejects the hypothesis that stumpage price systems are subsidies which injure the U.S. lumber industry.Item The Conservation Reserve Program and future use of enrolled land in Montana(Montana State University - Bozeman, College of Agriculture, 1992) Sheard, Michael David; Chairperson, Graduate Committee: James B. Johnson.The Conservation Reserve Program (CRP), as authorized by the Food Security Act of 1985 is a voluntary cropland retirement program which relies primarily upon positive economic incentives to farm operators in order to entice them to convert cropland considered highly erodible or otherwise environmentally sensitive into a conserving use for a ten-year period. Through 1989, Montana farm operators enrolled nearly 2.7 million acres of cropland into the CRP. The first CRP contracts were entered into in 1986 and thus will expire in 1995. Under current policy, once the ten year period is over, cropland enrolled in the CRP can be returned to annual cropping, can be used in some alternative commercial use such as haying or grazing, or can remain in a conserving use. There is much concern in Montana and other states over how the future use of these acres could affect commodity prices, farm incomes, government outlays, rural economic activity, and environment quality. This study examines the factors to be used by individual Montana CRP contract holders upon contract expiration to decide the disposition of their CRP land among the alternative uses. A firm level mean-variance decision model is used to incorporate the risk involved with each alternative. The model also considers any one-time start-up costs that may be incurred to convert CRP acres into an alternative use. Test results using survey data from Montana contract holders suggest that very few CRP acres in Montana will remain in a conserving use. Most respondents indicated that they plan to either return all of their CRP acreage to annual cropping, or will hay/graze all of the acreage. The results suggest that the greater the percentage of income derived from range livestock, the more likely the CRP land will be hayed or grazed. Similarly, the greater the percentage of income derived from cropping, the more likely the CRP land will be returned to annual cropping. The evidence is that more CRP land will be hayed or grazed on operations that currently have haying/grazing activities, or that have physical attributes to facilitate haying/grazing activities.