Cost and Efficiency of Alternative Land-Retirement Programs

Abstract

Costs of alternative land-retirement programs aimed at controlling supply in U.S. agriculture are estimated by applying interregional competition linear programming models to problems of production allocation under conditions of production capacity in excess of that necessary to meet specified demand levels. The crops considered are wheat, the four major feed grains, soybeans, and cotton. Both voluntary programs, allowing concentrations of diverted land in areas of least comparative advantage, and mandatory programs, requiring proportional participation in all regions, are considered. The study shows that total program costs can be minimized by concentrating land diversion in regions of least comparative advantage. Such a program would lead to large concentrations of diverted land in production areas of the Southeast and the Northern Great Plains. Mandatory programs requiring proportional land diversion in all regions lead to relatively high costs for land retired in the highly productive areas of the Great Plains, the Corn Belt, and the Pacific Northwest.