How Has U.S. Farm Policy Influenced Fruit and Vegetable Production?

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Eligibility requirements for farm payments include restrictions from planting certain horticultural crops on base acres, and U.S. commitments under the WTO have brought pressure to remove such restrictions. Using a difference-in-difference estimator, we measure the effects of the planting restriction on acres planted to horticultural and program crops using U.S. county-level data from both the 1987 and 1997 U.S. Census of Agriculture, that is, both before and after the initial policy was introduced in 1990. We find that the planting restriction has crowded out fruit and vegetable acreage nationally, and most notably in selected Sunbelt states, a region that specializes in horticultural crop production. The key policy implication is that the removal of the planting restriction may have a nontrivial impact on U.S. fruit and vegetable production.

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