The Common Agricultural Policy (CAP) is the agricultural policy of the European Union. It implements a system of agricultural subsidies and other programmes. It was introduced in 1962 and has undergone several changes since then to reduce the cost and to also consider rural development in its aims. It has been criticised on the grounds of its cost, and its environmental and humanitarian impacts.
An agricultural subsidy is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities. Examples of such commodities include: wheat, feed grains, cotton, milk, rice, peanuts, sugar, tobacco, oilseeds such as soybeans and meat products such as beef, pork, and lamb and mutton.
The Fair Deal was an ambitious set of proposals put forward by U.S. President Harry S. Truman to Congress in his January 1949 State of the Union address. More generally the term characterizes the entire domestic agenda of the Truman administration, from 1945 to 1953. It offered new proposals to continue New Deal liberalism, but with the Conservative Coalition controlling Congress, only a few of its major initiatives became law and then only if they had considerable GOP support. As Richard Neustadt concludes, the most important proposals were aid to education, universal health insurance, the Fair Employment Practices Commission, and repeal of the Taft–Hartley Act. They were all debated at length, then voted down. Nevertheless, enough smaller and less controversial items passed that liberals could claim some success.
The Commodity Credit Corporation (CCC) is a wholly owned United States government corporation that was created in 1933 to "stabilize, support, and protect farm income and prices". The CCC is authorized to buy, sell, lend, make payments, and engage in other activities for the purpose of increasing production, stabilizing prices, assuring adequate supplies, and facilitating the efficient marketing of agricultural commodities.
The Federal Agriculture Improvement and Reform Act of 1996, known informally as the Freedom to Farm Act, the FAIR Act, or the 1996 U.S. Farm Bill, was the omnibus 1996 farm bill that, among other provisions, revises and simplifies direct payment programs for crops and eliminates milk price supports through direct government purchases.
The agricultural policy of the United States is composed primarily of the periodically renewed federal U.S. farm bills. The Farm Bills have a rich history which initially sought to provide income and price support to US farmers and prevent them from adverse global as well as local supply and demand shocks. This implied an elaborate subsidy program which supports domestic production by either direct payments or through price support measures. The former incentivizes farmers to grow certain crops which are eligible for such payments through environmentally conscientious practices of farming. The latter protects farmers from vagaries of price fluctuations by ensuring a minimum price and fulfilling their shortfalls in revenue upon a fall in price. Lately, there are other measures through which the government encourages crop insurance and pays part of the premium for such insurance against various unanticipated outcomes in agriculture.
In United States federal agriculture legislation, the Agricultural Act of 1970 initiated a significant change in commodity support policy.
The Agriculture and Food Act of 1981 was the 4-year omnibus farm bill that continued and modified commodity programs through 1985. It set specific target prices for 4 years, eliminated rice allotments and marketing quotas, lowered dairy supports, and made other changes affecting a wide range of USDA activities. The next year this farm bill was amended to freeze the dairy price support level and mandate loan rates and acreage reserve provisions for the 1983 crops. Again in 1984, amendments were adopted to freeze target prices, authorize paid land diversion for feed grains, upland cotton, and rice, and provide a wheat payment-in-kind program for 1984.
The cotton competitiveness provisions are provisions added by the Food, Agriculture, Conservation, and Trade Act of 1990 to the cotton program designed to keep U.S. cotton prices competitive in domestic and export markets. Sometimes referred to as the “three-step competitiveness” provisions.
The Dairy and Tobacco Adjustment Act of 1983 is a United States federal law.
In the United States, Tobacco quotas were a supply control feature of federal price support for tobacco. Burley tobacco was subject to marketing quotas and flue-cured tobacco was subject to marketing quotas and acreage allotments. Tobacco quota owners voted every three years on whether or not to continue with price support and marketing quotas. Producers of several minor tobaccos had disapproved federal support. The national marketing quota was calculated according to a formula specified by law that included consideration of intended purchases by domestic manufacturers, average exports over the preceding three years, and reserve stock requirements. The effective quota was the basic quota plus and minus temporary adjustments for allowable previous year under and over marketings. The Fair and Equitable Tobacco Reform Act of 2004 ended tobacco quotas for 2005 crop and subsequent years.
The Tobacco Price Support Program used a combination of marketing quotas and nonrecourse loans to keep prices stable and higher than they would be otherwise in the United States. The tobacco quota limited production to raise prices. Nonrecourse loans allowed producers to hold tobacco stocks for long periods to balance supplies with market demand conditions.
A poundage quota, also called a marketing quota, is a quantitative limit on the amount of a commodity that can be marketed under the provisions of a permanent law. Once a common feature of price support programs, this supply control mechanism ended with the quota buyouts for peanuts in 2002 and tobacco in 2004.
The No Net Cost Tobacco Act of 1982 required that the Tobacco Price Support Program operate at no net cost to taxpayers, other than for the administrative expenses common to all price support programs. To satisfy this mandate, sellers and buyers of tobacco were assessed equally to build a capital account that was drawn upon to reimburse the Commodity Credit Corporation (CCC) for any losses of principal and interest resulting from nonrecourse loan operations. Other provisions of this law provided for reducing the level of support for tobacco and made various modifications to the marketing quota and acreage allotment programs. No net cost assessments ended when price support was terminated after the 2004 crop.
The 2002 farm bill replaced the longtime (65-year) support program for peanuts with a framework identical in structure to the program for the so-called covered commodities. The three components of the Peanut Price Support Program are fixed direct payments, counter-cyclical payments, and marketing assistance loans or loan deficiency payments (LDPs). The peanut poundage quota and the two-tiered pricing features of the old program were repealed. Only historic peanut producers are eligible for the Direct and Counter-cyclical Program (DCP). All current production is eligible for marketing assistance loans and LDPs. Previous owners of peanut quota were compensated through a buy-out program at a rate of 55¢/lb. ($1,100/ton) over a 5-year period.
Marketing assessments are payments in United States agriculture policy. At times, producers and first purchasers of some supported commodities are required to pay assessments as a contribution toward achieving budget deficit reduction targets. Under the 1996 farm bill, assessments were imposed on sugar processors and on producers and first buyers of peanuts. However, the 1996 farm bill eliminated a milk marketing assessment. The 2002 farm bill eliminated the assessments for peanuts and sugar. Tobacco was subject to a no-net-cost assessment on all marketings to offset Commodity Credit Corporation (CCC) losses on price support loan operations until support was ended in 2005 under the quota buyout provision.
In United States agricultural policy, additional peanuts refers to peanuts sold from a farm in any marketing year in excess of the amount of quota peanuts sold from that farm. Additional peanuts must be exported or crushed into oil and meal. Additionals are eligible only for the lower of two price support levels available under the peanut price support program. The lower additionals loan rate is set to ensure that the Commodity Credit Corporation does not incur losses on their sale and disposal.
The honey program is a price support program provided by the United States Department of Agriculture to American honey producers. Federal subsidies to the honey industry began in 1950, when demand for honey decreased following the end of World War II. The program was eliminated in 1993, and re-instated in 2002.
Flue-cured tobacco is a type of cigarette tobacco. Along with burley tobacco, it accounts for more than 90% of US tobacco production. Flue-cured farming is centered in North Carolina. Production was limited by national marketing quotas and acreage allotments. The crop was eligible for non-recourse price support loans until 2005, when the quota buyout program ended these programs.
The Agricultural Act of 1948 was enacted by the United States Congress and signed into law by President Harry S. Truman on July 3, 1948. The legislation revised and authorized several aspects of U.S. agricultural policy and agricultural subsidies.
