Agricultural Subsidies: Their Original Purpose and Impact Today
explanatory Essay
1924 words
Agricultural Subsidies: Their Original Purpose and Impact Today
Contents
Introduction: What are Farm Subsidies? 3
Government Intervention in Agribusiness 7
The Reality 9
Works Cited 12
Introduction: What are Farm Subsidies?
The Agriculture sector has changed monumentally over the past century in response to vast economic change and technological advancements. Farm subsidies are various forms of payments from the federal government put in place in an effort to stabilize prices, keep farmers in business, and ensure quality of crops. The federal government currently pays $20 billion in cash each year to US farmers and spent an estimated $250 billion between 1995-2005. Presently, a new farm bill is passed every five years with the most recent being in 2013 .
Although there are small changes with each preceding Farm Bill the permanent pieces of legislation requiring US Department of Agriculture to control pricing and regulate supplies date back to the 19th century.
The Commodity Credit Corporation (CCC) finances subsidies and buys surplus food to regulate and steady farm income. There are presently eights various subsidies: Direct Payments, Countercyclical Payments, Export Subsidies, Conservation Subsidies, Marketing Loans, Agricultural Research and Assistance, Disaster Aid, and Insurance.
1) Direct Payments: 5 billion annually
The federal government pays cash subsidies to landowners who produce: wheat, corn, sorghum, barley, oats, cotton, rice, soybean, minor oil seeds and peanuts. This combination of crops are considered to be the top ten crucial commodities. A direct payment is equal to the product of the payment rate for the specific crop, the historical payment acres, and the historical payment yield fo...
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Nathaniel, Jeroime. "Farm Bill 2013: An Inside Look At the Most Important Bill You've Never Heard Of." PolicyMic. Oct. 2013. 13 Apr. 2014 .
Peterson, E. Wesley F. A billion dollars a day: The economics and politics of agricultural subsidies. Malden, MA: Wiley-Blackwell, 2009.
"U.S. Department of Agriculture." U.S. Department of Agriculture. 11 Apr. 2014 .
"U.S. Farmers During the Great Depression." Farm Collector. 13 Apr. 2014 .
White, Deborah. "What Are U.S. Farm Subsidies?" About.com US Liberal Politics. 11 Apr. 2014 .
In this essay, the author
- Explains that the federal government pays cash subsidies to landowners who produce crops such as wheat, corn, sorghum, barley, cotton, rice, soybean, minor oil seeds, and peanuts.
- Explains countercyclical payments are similar to direct payments in that they both cover the same ten commodities. the program varies its subsidies based on market price and gives more when prices are lower.
- Explains that the usda controls a variety of business development aid programs in an effort to boost sales and presence in foreign markets.
- Explains that the conservation reserve program and conservation security program are controlled by the usda and aim to steady production.
- Explains that marketing loans originated as short-term loans to support prices but have now evolved into subsidies that set the price floor by paying a minimum for crops. farmers can use their crops as collateral to take out loans.
- Explains that the usda is funded to make a yearly analysis of statistical and economic data. this report is used to monitor progress of farm bill efficiency and survey effects of changes.
- Explains that the usda tries to eliminate risk for farmers by providing a farm insurance program. farmers are not liable when faced with price changes, contamination and bad weather conditions.
- Explains that disaster aid is a government bailout provided for commodities that are not covered by federal crop insurance.
- Explains that the agribusiness industry has grown out of necessitating government payments but farmers refuse to let go because they have grown accustomed to the support.
- Explains that the top 20% of farmers get 83% of all government payments while the bottom 80% receives an average of just $700.
- Explains that the cost creates a domino effect impacting producers, consumers, businesses, and the economy as whole. domestic and international companies are encouraged to look elsewhere for cost efficient materials to use as inputs.
- Explains kind, ron, "why our farm policy is failing." ron kind of wisconsin.
- Explains white, deborah, "what are u.s. farm subsidies?" about.com us liberal politics.
- Explains that the agriculture sector has changed monumentally over the past century in response to vast economic change and technological advancements. farm subsidies are various forms of payments from the federal government put in place to stabilize prices, keep farmers in business, and ensure quality of crops.
- Analyzes how the 19th century agribusiness saw both the height of prosperity and rock bottom. the stock market crash leading to the great depression left farmers running to sell their land.
- Explains that the usda's limits on production limit supply and drives up food prices. the usda counteracts itself by paying out money to raise prices and implementing aid programs.
- Explains that farmers who receive the majority of government aid are often not in need of it. on average, a successful farm is family owned for generations upon generations.
- Describes the top six reasons ewg opposes the farm bill and folsum, burton.
- Explains that moore, sam, and nathaniel, jeroime, "farm bill 2013: an inside look at the most important bill you've never heard of."
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1991 wordsRead More