Ex-ante analysis of structural change adjustments under the canadian agricultural income stabilization program

dc.contributor.advisorCranfield, John
dc.contributor.authorNakagawa, Ken
dc.degree.departmentDepartment of Agricultural Economics and Businessen_US
dc.degree.grantorUniversity of Guelphen_US
dc.degree.nameMaster of Scienceen_US
dc.description.abstractThe Canadian Agricultural Income Stabilization (CAIS) program was the new farm income support program introduced by the Canadian government in 2004. CAIS was designed to stabilize farm income by covering large and small declines in a reference margin. The reference margin is based on a five-year (Olympic) average of the production margin (defined as revenue minus expenses). Payouts are made if the production margin for the current year is less than for the reference margin. Given the nature of how reference margins are calculated, scope exists for producers to alter aspects of their production in order to become eligible for a payout. Such structural change is problematic as it suggests scope for misuse of the program (i.e., moral hazard). To deter potential moral hazard, CAIS includes a structural adjustment mechanism (SAM) to prevent such misuse. This study determines which factors within and outside the control of producers affects the reference margin, and the degree and direction of effect. An econometric model was used to estimate the impact of producer and market factors associated with structural adjustment on producers' reference margins. These results were used to differentiate between actual structural adjustment and variation based on fluctuations in different factors.en_US
dc.publisherUniversity of Guelphen_US
dc.rights.licenseAll items in the Atrium are protected by copyright with all rights reserved unless otherwise indicated.
dc.subjectCanadian Agricultural Income Stabilization programen_US
dc.subjectfarm incomeen_US
dc.subjectex-ante analysisen_US
dc.subjectstructural change adjustmentsen_US
dc.subjectreference marginen_US
dc.titleEx-ante analysis of structural change adjustments under the canadian agricultural income stabilization programen_US


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