@article{Chen:257921,
      recid = {257921},
      author = {Chen, Dean T. and Anderson, Carl G.},
      title = {Cotton Market Responses Under Alternative Acreage  Reduction and Paid Land Diversion Options},
      address = {1989-01-01},
      number = {1897-2017-1216},
      series = {89-1},
      pages = {13},
      year = {1989},
      abstract = {Unlike the major grains and soybeans, cotton was not  significantly affected by the 1988 drought. The large  cotton production, declines in domestic mill use and export  sales have combined to cause a sharp increase in the  1988/89 projected ending stocks to a burdensome level of  9.2 million bales, far beyond the 4 million target  specified in the 198S farm bill. A 2S percent ARP (Acreage  Reduction Program) set­aside was announced for the 1989  crop in late 1988, but no PLD (Paid Land Diversion)  provisions were included. Reflecting the industry's growing  concern over the cotton outlook, there are calls for  implementation of additional acreage reduction of PLD for  the next crop season. This study utilizes the AGGIES/Cotton  (AGricultural Globally Integrated Econometric System) model  to evaluate the effects of additional acreage reduction.  Three alternative acreage assumptions are analyzed: a 12.S  percent PLD for 1989/90, a 12.S percent PLD for the year  earlier (1988/89), and an increase of the 1988/89 ARP  percentage from the 12.S percent to 2S percent. The  simulation results indicate some increase in prices but  cash receipts and gross income in the year the program is  implemented would decline due to policy-induced production  cutback. Mill use and exports would also decline. U.S.  prices would be less competitive in the world market.  However, some program benefits can be expected, including a  reduction of excessive stocks and longer-term gains in  producer's incomes and savings in government program  costs.},
      url = {http://ageconsearch.umn.edu/record/257921},
      doi = {https://doi.org/10.22004/ag.econ.257921},
}