3.2 Example from Peanut Quota Program.pdf - Bene\ufb01ts and Costs in Primary and Secondary Markets An Example from the US Peanut Marke?ng Quota Program

3.2 Example from Peanut Quota Program.pdf - Beneufb01ts...

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Benefits and Costs in Primary and Secondary Markets An Example from the US Peanut Marke?ng Quota Program Benefits and Costs Within Markets
An Example: The U.S. Peanut Marke?ng Quota Program Ques%on: What is the benefit of using buyouts to end the US Peanut Marke%ng Quota Program? Background Established in the 1930s, it was designed to maintain high prices to support the incomes of peanut growers. USDA gave quotas to individuals giving them the exclusive right to sell a set amount of peanuts at or above some support price. This restricted the amount of peanuts for domesKc food use. The quota was essenKally an asset. Benefits and Costs Within Markets
The U.S. Peanut Marke?ng Quota Program was eliminated in 2002 The policy that ended the program The 2002 Farm Act eliminated the program. Producers were allowed to freely sell peanuts in the domesKc market. Those owning quotas in 2001 were compensated for the loss of the quota asset value with buyout payments spanning 5 years.

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