Are Government Programs Influencing Input Intensity?

Optimal variable input levels for farm program crops are examined. Calculus-derived inferences are contrasted for participating and nonparticipating producers. The effects of unfreezing farm program yields are also examined. An empirical extension of the methodology is presented using dynamic programming as a means of capturing the stochastic elements of the issue. Slightly higher optimal variable input levels per acre are identified for the participating and the unfrozenyield scenarios, over the nonparticipating scenarios. Factors affecting differences in optimal input use include expected net harvest price, curvature of the production function, input, cost, and the discount rate.