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Economic theory suggests several possible mechanisms through which direct government farm payments might influence the pattern of structural change in agriculture. This study estimates what effect farm payments have had on farm structure using farm-level panel data from the 1987, 1992, and 1997 Agricultural Censuses. Results suggest that the size of per-acre payments received in the past are associated with a small and weakly positive change in farm size between consecutive censuses, but that payments are significantly correlated with an increased likelihood of farm survival between consecutive periods.


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