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  • An Initial Assessment of the Payment-in-Kind Program

    AP-039, April 29, 1983

    Weak domestic demand, the first drop in exports in more than a decade, and large farm surpluses placed significant downward pressure on commodity prices and farm incomes and created the potential for large government outlays. The payment-in-kind (PIK) program was designed to idle substantial acreage without increasing government program costs. This report provides an assessment of the PIK program on production, prices, and incomes.

  • Possible Economic Consequences of Reverting to Permanent Legislation or Eliminating Price and Income Supports

    AER-526, January 01, 1985

    If the agricultural legislation expiring in 1985 is not replaced, farm price and income supports will revert from the programs provided for in the Agriculture and Food Act of 1981 and subsequent legislation to the programs provided for in the permanent support statutes. Reverting to the permanent support programs, dating back in some cases to the 1930s, would raise price and income support levels significantly and greatly reduce the role of market forces in determining farm returns. Conversely, if all price and income supports were eliminated in 1985, Government intervention in the market would end and supply and demand forces would determine farm returns. Adopting either of these two outerbound policy alternatives would have significant and far-reaching impacts on farm operations, the agribusiness sector, the general economy, and ultimately the world market for farm products.

  • Oats: Background for 1990 Farm Legislation

    AGES-8946, September 01, 1989

    This report address considerations in the 1990 farm bill debate for oats, including market conditions, policy proposals, trade agreements, and the interactions between policy and markets for selected commodities. Oats acreage has trended downward since the 1950s. Domestic production has not met domestic needs, thereby spurring imports. Production has declined due, in part, to current Government programs. Oats have rapidly become a specialty feed mostly for race and pleasure horses. Human food consumption of oats, once a stable component of disappearance, has begun to grow. Exports have become very small. Price support loans have been available to oats producers since 1945. However, deficiency and diversion payments were not made to them until 1983. Program costs in fiscal year 1989 are estimated at $40 million, about 5 percent of the 1988 crop value.

  • Corn: Background for 1990 Farm Legislation

    AGES-8947, September 01, 1989

    This report address considerations in the 1990 farm bill debate for corn, including market conditions, policy proposals, trade agreements, and the interactions between policy and markets for selected commodities. Corn is the leading U.S. crop, both in volume and in value. In 1987, farmers planted about 65 million acres and harvested 7.1 billion bushels. The farm value of production totaled about $13 billion, about 36 percent of farm receipts from crops. Rising corn yields and market prices strengthened corn farmers' cash flow positions in the late 1970s; however, per bushel real returns above cash expenses declined in recent years. Lower loan rates, the issuance and exchange of generic certificates, and devaluation of the U.S. dollar relative to the mid-1980s all contributed to the growth of U.S. corn exports in recent years. Government program costs for corn averaged more than $4.6 billion a year during the 1984-88 crop years, or 30 percent of the 15.7 billion corn crop value. Higher feed grain prices stemming from the programs comprise an additional cost to the livestock sector and consumers.

  • Provisions of the Food, Agriculture, Conservation, and Trade Act of 1990

    AIB-624, June 03, 1991

    The Food, Agriculture, Conservation, and Trade Act of 1990 (P.L. 101-624) establishes a comprehensive framework within which the Secretary of Agriculture will administer agricultural and food programs from 1991 to 1995. This report describes provisions of the 1990 Act as amended by the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508). Provisions for all major commodity programs, such as income and price support, are reported, as well as general commodity provisions, trade, conservation, research, food stamps, fruit and vegetable marketing, organic food standards, grain quality, credit, rural development, forestry, crop insurance and disaster assistance, and global climate change provisions.

  • Market-Oriented Agriculture: The Declining Role of Government Commodity Programs in Agricultural Production Decisions

    AER-671, June 01, 1993

    The portion of U.S. agricultural production covered by government income support payments has declined over the span of the last two 5-year farm acts. Consequently, nongovernmental supply and demand factors (market forces) are becoming more important in influencing farmers' production decisions. This report illustrates how agricultural supply has moved toward greater reliance on market forces (market orientation) by examining the declining role of government commodity programs in production decisions for corn, wheat, rice, and upland cotton. Payment coverage ratios, which measure the percentage of expected production covered by deficiency payments (income support payments made by the Federal Government to producers of certain agricultural commodities), have decreased. Thus, the role of government commodity programs in influencing farmers' production decisions at both the individual farm and national (aggregate) levels has declined. As a result, the share of US. cropland on which planting decisions are made based on market signals has increased, a trend toward market orientation that began with the 1985 farm act and continued with 1990 farm legislation.

  • Provisions of the Federal Agriculture Improvement and Reform Act of 1996

    AIB-729, September 01, 1996

    This report provides an item-by-item description and explanation of the new Act, which will guide agricultural programs from 1996-2000. Signed into law in April, the act makes significant changes in long-standing U.S. agricultural policies. Major changes in U.S. commodity programs are included in the Act's Title I, known as the Agricultural Market Transition Act.

  • Structural and Financial Characteristics of U.S. Farms: 2001 Family Farm Report

    AIB-768, May 25, 2001

    Family farms vary widely in size and other characteristics, ranging from very small retirement and residential farms to establishments with sales in the millions of dollars. The farm typology developed by the Economic Research Service (ERS) categorizes farms into groups based primarily on occupation of the operator and sales class of the farm. The typology groups reflect operators' expectations from farming, position in the life cycle, and dependence on agriculture. The groups differ in their importance to the farm sector, product specialization, program participation, and dependence on farm income. These (and other) differences are discussed in this report.

  • Wheat: Background and Issues for Farm Legislation

    WHS-0701-01, August 01, 2001

    Congress is considering new farm legislation to replace the expiring Federal Agriculture Improvement and Reform Act of 1996. As background for these deliberations, this report provides information on supply, demand, and prices in the U.S. wheat sector and examines alternative policy choices.

  • The 2002 Farm Act: Provisions and Implications for Commodity Markets

    AIB-778, November 14, 2002

    The Farm Security and Rural Investment Act of 2002 (2002 Farm Act), which governs agricultural programs through 2007, was signed into law in May 2002. This report presents an initial evaluation of the new legislation's effects on agricultural commodity markets, based on sectorwide model simulations under alternative policy assumptions. The analysis shows that loan rate changes under the marketing assistance loan program of the 2002 Farm Act initially result in an increase in total planted acreage of eight major program crops. This increase in plantings, however, is relatively small (less than 1 percent), partly due to the inelasticity of acreage response in the sector. In the longer run, the simulations indicate that overall plantings of the eight program crops studied are lower under the 2002 Farm Act than under a continuation of the 1996 Farm Act. This result mostly reflects larger enrollment in the Conservation Reserve Program and increased plantings of dry peas and lentils, although planted acreage for the eight program crops is reduced by less than 0.6 percent. The effects of the 2002 Farm Act on the livestock sector and retail food prices are relatively small. Farm income is increased, mostly due to higher government payments to the sector under the new law.

  • Farm Payments: Decoupled Payments Increase Households' Well-Being, Not Production

    Amber Waves, February 03, 2003

    Although decoupled payments do not distort price incentives for producers, they can still alter production decisions because payments increase farm operators' income, and the expectation of fixed, future payments increases their wealth. Increased income and wealth from decoupled payments, as from any other source of income, has lasting effects on households' decisions about how much to spend, save, and work.

  • Emphasis Shifts in U.S. Agri-Environmental Policy

    Amber Waves, November 01, 2003

    With the passage of the 2002 Farm Act, policymakers have substantially increased conservation funding and made changes in program emphasis. The goals are to expand the amount of U.S. land and the number of farmers covered by conservation programs.

  • A Historic Enlargement: Ten Countries Prepare To Join the European Union

    Amber Waves, April 01, 2004

    In May 2004, eight Central and Eastern European countries (Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Estonia, Latvia, and Lithuania), plus Cyprus and Malta, will join the European Union (EU). This enlargement of the EU, the largest in its history, will bring profound changes.

  • European Union Adopts Significant Farm Reform

    Amber Waves, September 01, 2004

    In 2003 and 2004, the European Union adopted major reforms to its agricultural policy. The changes will have important implications for the way the EU supports its farm sector, for its obligations under current WTO agreements, and for its position in ongoing WTO agricultural negotiations.

  • Devolution of Farm Programs Could Broaden States' Role in Ag Policy

    Amber Waves, November 01, 2004

    U.S. farms vary greatly in size, specialty, and household characteristics. U.S. regions differ markedly in natural resource endowments. And States themselves are widely divergent in terms of their preferences as to how funds from agricultural programs should be spent. Given this diversity, can the delivery of agricultural programs be better tailored to distinct State and local circumstances? Devolution, or the transfer to States of Federal funds and/or control of those funds, is one way of adapting national policies to suit local preferences more closely and of recognizing that program delivery costs can vary geographically.

  • U.S. Peanut Sector Adapts to Major Policy Changes

    Amber Waves, November 01, 2004

    "U.S. Peanut Sector Adapts to Major Policy Changes" examines the experience of the peanut sector following the 2002 Farm Act's elimination of the marketing quota system, and identifies factors affecting the transition to a more market-oriented system. Although peanut prices and acreage declined following passage of the 2002 Farm Act, it appears that producers are taking advantage of increased planting flexibility to expand production in higher yielding areas, and the transition has been cushioned by rising demand, and additional sources of revenue from government payments and other sources of farm and off-farm income.

  • Trends in U.S. Tobacco Farming

    TBS-25702, November 08, 2004

    Tobacco farms are becoming fewer in number and U.S. tobacco acreage has declined since the 1950s. This article provides a snapshot of tobacco farm characteristics as of 2002. The number of farms growing tobacco in the United States dropped from 512,000 in 1954 to 56,977 in 2002, with 37,013 classified at tobacco farms, that is, tobacco constituted at least 50 percent of their sales. All farms producing tobacco averaged about 7.5 acres in 2002, compared with 9.0 acres in 1997. Tobacco farms averaged only 62 acres of harvested cropland and 175 acres of total farmland.

  • Why Hasn't Crop Insurance Eliminated Disaster Assistance?

    Amber Waves, June 01, 2005

    In 1995, 80 percent of eligible U.S. farm acreage was enrolled in crop insurance. Still, Congress has continued to pass ad hoc disaster assistance measures in reaction to drought and other adverse events. Since 2000, four such programs have been authorized, covering 6 crop years for a total cost of about $10 billion.

  • Data Feature

    Amber Waves, June 01, 2005

    U.S. agriculture underwent a tremendous transformation during the 20th century--the structure of farming and rural life barely today resembles that of the early 1900s. A comparison of data across the century reveals trends of increasing farm size, falling farm population, increasing specialization of farms, and the growing importance of new stakeholders.

  • The 20th Century Transformation of U.S. Agriculture and Farm Policy

    EIB-3, June 01, 2005

    The structure of farms, farm households, and the rural communities in which they exist has evolved markedly over the last century. Historical data on a range of farm structure variables-including the value of agricultural production, commodity specialization, farming-dependent counties, and off-farm work-offer a perspective on the long-term forces that have helped shape the structure of agriculture and rural life over the past century. These forces include productivity growth, the increasing importance of national and global markets, and the rising influence of consumers on agricultural production. Within this long-term context of structural change, a review of some key developments in farm policy considers the extent to which farm policy design has or has not kept pace with the continuing transformation of American agriculture.