The effects of requiring capitalization of citrus and almond orchard development expenses on acreage, production and product prices for seven California orchard and vine crops are estimated. Acreage and production of citrus and almonds decreased, as expected. The decreases in orange and lemon acreage, however, were more than offset by increased acreage of walnuts and grapes. The switch of developer and investor interest to walnuts and grapes appears to have added to the cyclical instability of production and prices for these two crops. Perennial crop adjustments to selective changes in tax provisions involve very significant time lags.


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