Domestic Agricultural Policy Issues

Eliminating Fruit and Vegetable Planting Restrictions: How Would Markets be Affected? finds that market effects would likely be limited and confined to specific regions and commodities. Eliminating these planting restrictions for commodity program participants might enable some producers to switch from program crops to fruit and vegetables in such areas as California, the upper Midwest and the coastal plain in the Southeastern states. See also the AmberWaves feature article, Relaxing Fruit and Vegetable Planting Restrictions.

Economic Analysis of Base Acre and Payment Yield Designations Under the 2002 U.S. Farm Act evaluates farmers' decisions in designating base acres (historical plantings) under the 2002 Farm Act. Findings suggest that decisionmakers responded to economic incentives in their designations of base acres by selecting options that resulted in the greatest expected flow of program payments. See also Farm Program Acres for the county-level farm program and planted acreage data used in the report, which can be downloaded and mapped.

Managing Risk With Revenue Insurance discusses crop revenue insurance as a method farmers use to manage revenue variability that results from yield and price risks.  Commodity-level revenue insurance, particularly for corn, soybeans, and wheat, has become a major part of the subsidized Federal crop insurance program.  Whole-farm revenue insurance, based on combined revenue from all commodities produced on a farm, is a more broad-based approach, but is difficult to administer.

Whole-Farm Approaches to a Safety Net looks at the risk management potential of "whole-farm revenue" programs to ensure farmers a minimum level of economic well-being. A whole-farm program is based on revenues from all farming activities added together and is not linked to the production of particular commodities.

Why Hasn't Crop Insurance Eliminated Disaster Assistance? points out that despite increased participation in crop insurance, Congress has continued to enact ad hoc disaster assistance packages. One factor: inadequate protection in some regions and for some crops raise the prospect of ad hoc disaster assistance.

What is Meant by Decoupling? presents a concise overview of an approach to supporting farm income through fixed payments tied to historical plantings rather than to current production. What pressures led to the growing use of decoupled programs under the 1996 and 2002 Farm Acts, and how can decoupled payments affect production decisions?

Decoupled Payments: Household Income Transfers in Contemporary U.S. Agriculture  indicates that production flexibility contract (PFC) payments under the 1996 Farm Act improved the well-being of participating farm households, with well-being encompassing income, wealth, and consumption, as well as labor/leisure choices. These decoupled payments—not tied to production or prices—raised land values but have had minimal impact on production, and thus on trade.

Decoupled Payments in a Changing Policy Setting analyzes the U.S. experience with decoupled payments in the Production Flexibility Contracts program from 1996 to 2002. The studies in this report consider the effects of decoupled payments on recipient households, and assess land, labor, risk management, and capital market conditions that can lead to links between decoupled payments and production choices.

Programs, Payments, and People: Economic Briefs on Conservation Program Design explore various design options for voluntary conservation payment programs. Achieving program goals in a cost-effective manner hinges on the decisions  policymakers and program managers make about who is eligible to receive payments, how much can be received, for what action, and how applicants are selected.

Agricultural Policy Affects Land Use and the Environment examines environmental outcomes of land-use conversion prompted by two agricultural programs: Federal crop insurance subsidies and the Conservation Reserve Program. Policy changes as well as economic conditions encourage producers to shift less productive cropland in and out of production. Because marginal lands are more environmentally sensitive than more productive land, cropland shifts have environmental as well as economic effects.

Traceability in the U.S. Food Supply: Economic Theory and Industry Studies describes the results of an investigation into the amount, type, and adequacy of traceability systems in the United States.  Findings indicate that the cattle/beef sector has a long history of identifying and tracking animals to establish rights of ownership and to control the spread of diseases.  Another motive for establishing traceability systems is that many valuable animal attributes are not evident to the naked eye or specialized testing equipment.

The 2002 Farm Bill: Provisions and Economic Implications presents an overview of the Act and a side-by-side comparison of 1996-2001 farm legislation and the 2002 Act. For selected programs, links are provided to additional analyses of key changes, program overview, and economic implications

Provisions of the 1996 Farm Bill includes an overview on how the Farm Act framed farm policy for 7 years; a glossary of agricultural policy terms; and a side-by-side comparison of 1990 and 1996.

See the Program Provisions and Farm Policy History section of the Recommended Readings page in the ERS Farm and Commodity Policy Briefing Room for ERS research and analysis related to previous Farm Acts.