Rural Direct and Counter-cyclical Payments and Their Impact in a Rural-urban Perspective (A Case in Oklahoma)

Abstract

The total value of goods and services traded between rural and urban Oklahoma is estimated around $7.42 billion in 2008. Rural Oklahoma supplied urban Oklahoma with basic ag commodities while urban Oklahoma furnished rural Oklahoma with higher order goods and services. Both regions are more interconnected with the rest of the US and the world than they are with each other. Using the same rural-urban framework, the impact of $68.5 million direct and counter-cyclical payments to rural farmers was determined. The inter-regional effect of this shock to the urban economies is only 6%, 9%, and 6% of the total rural and urban impact on employment, labor income and value added respectively.