The impact of selected United States farm policy reforms on the United States cotton industry

For the past 70 years, the competitiveness of the U.S. cotton industry has often depended on government support and protection against market uncertainties and foreign competition. With increasing farm-policy budgetary outlays and the changing international trading rules, however, there is a need to limit government intervention in the industry, and allow farmers to rely on market price signals for planting decisions.;In this dissertation, I estimated the industry supply response to market prices and policy provisions; also, I evaluated the impacts of discontinuing Step 2 of the marketing loan program, maintaining current market-oriented policies, and withdrawing the federal government from the boll weevil eradication program (BWEP).;Ordinary Least Squares and Partial Equilibrium models were used to achieve these objectives. Results indicated that, at a≤ 5%, acreage was own-price responsive in the Southern Plains and Southwest, and price unresponsive in the Delta and Southeast, at a = 10%. Short- and long-run U.S. acreage price responses were inelastic.;Ending Step 2 payments will decrease the domestic price, production, mill use, and exports by 17%, 7%, 15%, and 16%, while increasing inventory demand by 39%. With market-oriented policies, production will increase by 8.4%, causing the price to fall by 5.9%, and mill use, exports, and inventory demand to increase by 1.8%, 8.6%, and 14%. If BWEP is terminated, production is expected to fall by about 14.4%, price will rise by 10%, mill use, exports, and inventory demand will fall by 3%, 14.7%, and 24%, respectively.;Discontinuing BWEP and re-introducing acreage-control programs will reduce production by 23%, increase the price by 16%, decrease mill use, exports, and inventory by 5%, 23%, and 38%. Ending BWEP and Step 2 will result in 21.2%, 6.6%, 18.4%, and 30.5% decline in price, production, mill use, and exports, and in a-15.5% increase in inventory. A simultaneous discontinuation of BWEP, Step 2, and market-oriented policies will cause the domestic price, production, and mill use to fall by 3.2%, 30.6%, and 19.4%. The inventory will increase by 7.5%, while the U.S. will lose 46% of its export share.;This study showed that farmers' response to market signals will vary by regions, and revealed the importance of maintaining Step 2, market-oriented policies, and BWEP in keeping the industry competitive domestically and internationally. Further research is needed to confirm or refute these findings and to address issues raised herein.