Farm Subsidies

A Local Look at Farm Subsidies The current Farm Bill is set to expire in 2012 and in this climate of spending reductions and budget balancing, there has been a lot of talk about reducing or eliminating many farm subsidies. The purpose of this paper and my research is to see what if any impact the elimination of the commodity subsidies would have on the local farming economy. The objectives of this paper are to examine the history of farm subsidies, the current Farm Bill, various commodity subsidy programs, criticisms of the current programs, and get a local perspective of the current effectiveness of the subsidy programs. One of the earliest farm bills introduced by the Federal Government was called the Agriculture Adjustment Act. The Agriculture Adjustment Act was proposed in 1938. Farm incomes were rapidly falling as the Great Depression deepened. In the early twentieth century more than 25% of American were farmers. The government hoped to increase farm income by providing incentives to farmers to take farm land out of production, and thus reducing supply. The Act also provided subsidies for the major commodities of corn, wheat, and cotton ("Agricultural Adjustment Administration," n.d.). This Act is considered to be the beginning of the modern farm bill. There have been 15 major farm bills pass since the 1938 Agriculture Adjustment Act. Starting in 1973 the Farm Bill has been revised about every 5 years. The Food Conservation and Energy Act of 2008 is the current Farm Bill, with many provisions set to expire in 2012. There are 15 titles in the bill and they cover areas such as commodity price supports, farm credit trade, rural development, and nutrition. The Congressional Budget Office estimated in 2007 that the FY2008-FY2012 farm bill would cost $284 billion over five years(Congressional Research Service, 2010). It should be noted that Title IV in the farm bill covers nutrition. This title includes the food stamp program. The nutrition program is

References: Agricultural Adjustment Administration. n.d. Retrieved from http://www.infoplease.com/ce6/history/A0802770.html Congressional Research Service. (2010). Actual Farm Bill Spending and Cost Estimates. (CRS Publication R41195). Retrieved from http://www.nationalaglawcenter.org/assets/crs/RS22131.pdf Farm Subsidy Primer. n.d. Retrieved from http://farm.ewg.org/subsidyprimer.php Lamb, R.L. (2003). The New Farm Economy. Retrieved from http://www.cato.org/pubs/regulation/regv26n4/v26n4-1.pdf Riedl, B.M. (2007) How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too. Retrieved from http://www.heritage.org/research/reports/2007/06/how-farm- subsidies-harm-taxpayers-consumers-and-farmers-too Sayre, L. (2003). Farming without subsidies? Retrieved from http://newfarm.rodaleinstitute.org/features/0303/newzealand_subsidies.shtml