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In an analysis of the determinants of government payments to a farm the paper finds cropping patterns, soil productivity, and more importantly human capital variables such as education, and age as significant. While analyzing the effect of government payments on the profit efficiency of agriculture the paper finds that the inclusion of government payments does not cause structural change in US agriculture (i.e., a change in returns to scale of the underlying technology). Nevertheless, the paper does find evidence of an indirect effect of government payments on efficiency. Farms that received greater government payments on aggregate were more efficient than other farms.


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