The Impact of Governmental Programs on Wheat Acreage.

This article reports on an empirical investigation of the impact of agricultural policy on the acreage-supply response of wheat. One of the important purposes of the commodity programs governing wheat has been to raise incomes to wheat growers. Since 1934 the federal government has employed a number of alternative programs to accomplish this end. Relying on the sharply inelastic demand for wheat, the programs have attempted to reduce wheat acreage below that which would be planted in a free market and, thereby, to raise prices sufficiently to insure larger gross and net incomes to wheat growers. In the study conducted an econometric model for the period 1934 to 1968 is developed and estimated using annual time-series data. The study conducted concludes that agricultural programs have exerted a significant influence on the amount of wheat acreage planted since 1933. This result is especially pronounced over the period 1954-70. The study conducted also elaborates that planted wheat acreage has been responsive to the loan level, the acreage allotment, direct payments, acreage reserve payment rates, and to a lesser extent, the soil banks conservation reserve program. It also remarked that lagged market price has not been an important determinant in the acreage planted to wheat.