THE MARKET FOR LAND AND THE IMPACT OF FARM PROGRAMS ON FARM NUMBERS

If a land price is to be observed, there must be trades of land. If the aggregate quantity of land in agriculture is fixed, those trades must be among farmers. This paper presents a model in which farmers of differing "ability" trade land among themselves. The model is used to evaluate the impact of farm programs (a demand enhancement program; a price support program; a land retirement program; an income subsidy program) on output price, land price, and number of farmers. Effects of these programs depend on conditions that require empirical evaluation. Preliminary evidence suggests that some standard tools of farm policy have the effect of reducing farm numbers.