The report presents the effects of single-year grain storage subsidy programs and evaluates the sensitivity of stock demand to alternative subsidy levels, stock caps, and entry provisions. The analysis was stimulated by the administration's Farmer-Owned Reserve (FOR) proposal in the 1990 Farm Bill Proposal of the Administration. The effects of a single-year storage subsidy relative to the current FOR would be that stocks would be lower, prices could be more variable, and more grain could be forfeited to the Commodity Credit Corporation (CCC). However, program costs would be lower, management would be simpler, and administrative uncertainty would be reduced. Compared with having no FOR, stocks would be higher and price extremes would be reduced. Whether more or less grain would be owned by the CCC is indeterminate. Government costs would rise, management would be more difficult, and administrative uncertainty would be greater relative to no FOR.


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