Suchergebnisse

AbstractThe Congressional Budget Office (CBO) projections of USDA's mandatory farm and nutrition program outlays are important in shaping US agricultural policy. Using CBO projections and observed outcomes from 1985 through 2020, we examine the degree to which projections of farm, supplemental nutrition assistance program (SNAP), and child nutrition program outlays are unbiased, efficient, and informative. We find that projections for farm and child nutrition program outlays are unbiased, SNAP outlays are unbiased at short‐term but are downward biased beyond a 3‐year horizon. All three series of projections are inefficient. SNAP and child nutrition program outlay projections are informative up to a 5‐year horizon, but the farm program outlay projections are informative for only a 1‐year horizon. Disaggregated farm program data since 2008 suggests that the uninformativeness principally stems from conservation and commodity program projections. The findings may be valuable to CBO, as they continue to improve projections, and to projection users, in adjusting their expectations.

AbstractThis study evaluates a system of USDA's Net Cash Income forecasts, released as part of the farm sector's income statement, which includes crop receipts, livestock receipts, government payments, farm‐related income, and expenses from 1986 to 2017. We examine these forecasts jointly for bias, accuracy, efficiency, and compositional consistency. Our findings demonstrate that underestimation in early Net Cash Income forecasts stems from underestimation in crop and livestock receipts as well as expenses forecasts. While most components except government payments contribute to the improvement in 12‐month‐ahead forecasts, improvements in 9‐month‐out forecasts are mostly due to crop receipts and expenses forecasts, and government payment forecasts were a main source of improvement in 6‐month‐ahead forecasts. Despite the observed biases and inefficiencies, these forecasts are compositionally consistent with the actual outcomes and represent realistic projections of the farm sector accounts.

AbstractCrop insurance protects lenders by increasing the likelihood of loan repayment when revenue declines. We develop a theoretical mode that explains the role of crop insurance in agricultural lending and how impacts may be different for lenders that are not specialized in agricultural lending. We then test whether the total volume of production credit extended by commercial banks at the county level increases in response to crop insurance availability and whether the level of the response is related to bank specialization in agriculture. We use a novel difference‐in‐differences strategy based on some counties having a higher share of agricultural production that was not covered by Federal crop insurance in the 1990s. Crop insurance has a robust relationship with increased loan volumes during this period, especially in counties with fewer banks specialized in agriculture.