T HE PRICE SUPPORT and production control program for peanuts has been in effect since the thirties as a means of increasing and stabilizing the price of peanuts. To maintain prices at parity levels, the program controls supply by acreage allotments which rigidly restrict the acreages eligible for price support. The allotment thus tends to take on value in its role as a license to produce. This implies that, when farms are sold, anticipated future peanut-growing benefits from the allotment are capitalized into farm land values. To the degree that this capitalization takes place, those persons owning the land factor are the beneficiaries of the program. This analysis seeks to determine the extent to which peanut program returns are reflected in the sale value of farms. More specifically, what have farm buyers and sellers determined as the price of land with a peanut allotment as opposed to land without an allotment? This paper summarizes the initial phase of a regional land values project representing the Virginia-North Carolina peanut-producing region.
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James L. Hedrick (1962) studied this question.