@article{Hoover:259528,
      recid = {259528},
      author = {Hoover, Dale M. and Brooks, Charles},
      title = {AN ECONOMIC ANALYSIS OF THE SALE OF COTTON ALLOTMENT  ACROSS COUNTY LINES IN 1966},
      address = {1968-01-01},
      number = {1908-2017-1914},
      pages = {54},
      year = {1968},
      abstract = {The sale of cotton allotments among producers has been of  minor importance relative to programs allowing leasing,  release and reapportionment and voluntary diversion under  the domestic allotment program. Allotment sale is, however,  a potentially important device in the reorganization of  cotton allotment among producers and regions. This  reorganization is important if farms are to grow to  efficient sizes and if areas which have experienced the  greatest growth in productivity are to increase acreage  produced. The sale of cotton allotment among all producers  within the state is of interest to owners of other  allotments because this is the first time permanent  transfer has been allowed and because allotment can be  transferred across county lines. The sale of cotton  allotment was authorized in the Food and. Agriculture Act  of 1965. In 1966, slightly more than 4,700 acres of  allotment were transferred across county lines. The sample  obtained for this study included 578 contracts representing  a little more than 4,000 acres of transferred allotment.  Most of the transfer was from counties located in the  Piedmont. The major receiving area was in the South Central  portion of the state. Farmers in the Lower Coastal Plain  area of the state sold some allotment but leased even  greater quantities. Similarly, some allotment was purchased  by farmers in the Northeast area but leasing was of greater  importance in increasing allotment acreage. This pattern of  transfer suggests that exchange of allotment tends to be  concentrated in relatively nearby areas. The mean sales  price reported by transferring farms was 13.8 cents per  pound of projected yield. The mean reported by receiving  farms was 12.7 cents per pound. The average reported price  varied among four areas within the state, but the  differences were not substantial. The mean prices per acre  were $51.44 and $57.04 for transferring and receiving  farms, respectively. The difference is due to higher  projected yields on receiving farms. There was little  systematic variation in prices. A small time trend in  prices was found to be statistically significant. Prices  were a little higher late in the trading season. Farmers  who purchased large quantities of allotment paid slightly  more than farmers purchasing small amounts of allotment.  This finding runs counter to the generally held notion that  large farmers have more market information and consequently  "take advantage" of small farmers. Receiving farms were  five to six times as large as transferring farms on the  average. There was great variation in size among the  receiving farms. Information on a portion of the sample  receiving farms indicates that farms with more than 100  acres of 1966 effective allotment were responsible for  two-thirds of the total purchase of allotments across  county lines in 1966. This suggests that purchase of  allotment may be playing an important role in the increase  of the number of efficientsized farms. On the other hand,  the proportion of effective allotment that was purchased  declined as size of farm increased. Other allotment  transfer programs are also important in aiding farms to  grow. Variation in the price paid per pound is an  indication that the transfer market did not work perfectly.  As the density of transfer increased, the variance in  prices paid decreased. This result suggests that the  performance of this market could be improved if central  trading of allotment could be organized. The current system  of contracting between producers in widely separated areas  is time consuming and expensive. The development of a  central allotment transfer market would probably require  some enabling legislation but the amount and efficiency of  transfer might be greatly increased.},
      url = {http://ageconsearch.umn.edu/record/259528},
      doi = {https://doi.org/10.22004/ag.econ.259528},
}