Time for a New Farmer-Owned Reserve?

Chad E. Hart, Bruce A. Babcock
August 2000  [00-BP 31]

Because of low harvest prices over the last three years, several congressmen and agricultural advisors are calling for increased government involvement in grain stock management in the belief that the government should remove grain from the market when prices are low and return it to the market when prices recover. Proposals for government involvement run from a simple extension of the loan period to the establishment of a new Farmer-Owned Reserve (FOR) program, whereby the government subsidizes long-term storage of grain. To gain insight into whether government involvement in grain markets should increase, the authors discuss various lessons that can be learned from past FOR operations.

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