OBJECTIVES AND CONSTRAINTS OF GOVERNMENT POLICY - THE COUNTERCYCLICITY OF TRANSFERS TO AGRICULTURE

Estimates of government transfers to typical U.S. com, wheat, and cotton farms are regressed on estimates of market-derived farm income to show that U.S. farmers receive greater government transfers when they face relatively unfavorable market conditions. This transfer countercyclicity is shown to be unrelated to potential deadweight losses constraining government transfers. It is argued that prevailing political economy models have difficulty explaining transfer countercyclicity because they focus on political agents' constraints to the neglect of political agents' objectives.