Impact of Macroeconomic Policy on U.S. Cotton Producers

Abstract

Many Cotton producers, like other farmers, are currently experiencing server financial stress. A contributing factor to deteriorating financial conditions in agriculture is the choice of marcoeconomic policies followed in recent years. This paper illustrates how specific combinations of monetary and fiscal policy affect the financial condition and performance of producers of cotton and other raw food and fiber products. Of the four policy combinations examined, the combination of lower budget deficits and a moderate monetary policy offers the best hope for improving financial conditions of cotton producers.