ABSTRACT
The General Firm Level Policy Simulation Model, FLIPSIM V, was used to evaluate the economic impact of strictly enforced payment limitations on various size cotton farms for the remaining life of the Food Security Act of 1985. Results supported the concept that small farms are unaffected by payment limitations. However government payments, obtained by the legal division of larger farms in order to obtain multiple payment limitations, were used to cover expenses since costs of production exceeded market receipts. Reduction in payment limitations resulted in negative net farm income and severely compounded financial problems of commercial farms to the extent that some farms would be forced to reduce size and/or become bankrupt.
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