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Farm programs do have an effect on land values. The proposed farm bill (House and Senate versions) eliminates direct payments and replaces them with a type of revenue safety net. Analyze the effect of this change on farmland values. The direct payment is a direct, decoupled payment that is paid on base acres whether that crop is grown or not (cotton grown on cotton base acres, for ex) or even if no crop is grown. Do you think elimination of the direct payment would also affect the variability, or risk, in farmland values? Why?

Microeconomics, Economics

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