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The Agricultural Adjustment Act (AAA) was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part of their land. The money for these subsidies was generated through an exclusive tax on companies which processed farm products. The Act created a new agency, the Agricultural Adjustment Administration, also called "AAA" (1933-1942), an agency of the U.S. Department of Agriculture, to oversee the distribution of the subsidies. The Agriculture Marketing Act, which established the Federal Farm Board in 1929, was seen as an important precursor to this act. The AAA, along with other New Deal programs, represented the federal government's first substantial effort to address economic welfare in the United States.
Crop insurance is insurance purchased by agricultural producers and subsidized by a country's government to protect against either the loss of their crops due to natural disasters, such as hail, drought, and floods ("crop-yield insurance", or the loss of revenue due to declines in the prices 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.
In the United States, the farm bill is the primary agricultural and food policy instrument of the federal government. Every five years, Congress deals with the renewal and revision of the comprehensive omnibus bill.
The Food, Conservation, and Energy Act of 2008 was a $288 billion, five-year agricultural policy bill that was passed into law by the United States Congress on June 18, 2008. The bill was a continuation of the 2002 Farm Bill. It continues the United States' long history of agricultural subsidies as well as pursuing areas such as energy, conservation, nutrition, and rural development. Some specific initiatives in the bill include increases in Food Stamp benefits, increased support for the production of cellulosic ethanol, and money for the research of pests, diseases and other agricultural problems.
In the United States, the Acreage Reduction Program (ARP) is a no-longer-authorized annual cropland retirement program for wheat, feed grains, cotton, or rice in which farmers participating in the commodity programs were mandated to idle a crop-specific, nationally set portion of their base acreage during years of surplus. The idled acreage was devoted to a conserving use. The goal was to reduce supplies, thereby raising market prices. Additionally, idled acres did not earn deficiency payments, thus reducing commodity program costs. ARP was criticized for diminishing the U.S. competitive position in export markets. The 1996 farm bill did not reauthorize ARPs. ARP differed from a set-aside program in that under a set-aside program reductions were based upon current year plantings, and did not require farmers to reduce their plantings of a specific crop.
The Agricultural Act of 1956 created the Soil Bank Program, addressed the disposal of Commodity Credit Corporation (CCC) inventories of surplus stocks, contained commodity support program provisions, and contained forestry provisions. The Soil Bank Act authorized short- and long-term removal of land from production with annual rental payments to participants. The Acreage Reserve Program, for wheat, corn, rice, cotton, peanuts, and several types of tobacco, allowed producers to retire land on an annual basis in crop years 1956 through 1959 in return for payments. The Conservation Reserve Program allowed producers to retire cropland under contracts of 3, 5, or 10 years in return for annual payments. The Soil Bank Act was repealed by Section 601 of the Food and Agriculture Act of 1965. The Conservation Reserve portion of the Soil Bank was a model for the subsequent Conservation Reserve Program (CRP), enacted in 1985.
The Agricultural Market Transition Act (AMTA) — Title I of the 1996 U.S. farm bill — allowed farmers who had participated in the wheat, feed grain, cotton, and rice programs in any one of the five years prior to 1996 to enter into seven-year production flexibility contracts for 1996-2002. Total national production flexibility contract payments for each fiscal year were fixed in the law. The AMTA allowed farmers to plant 100% of their total contract acreage to any crop except fruits and vegetables, and receive a full payment. Land had to be maintained in agricultural uses. Unlimited haying and grazing and planting and harvesting alfalfa and other forage crops was permitted with no reduction in payments. AMTA commodity support provisions were replaced by the 2002 farm bill, a six-year farm bill.
In United States agricultural law, a farm’s base acreage is its crop-specific acreage of wheat, corn, grain sorghum, barley, oats, upland cotton, soybeans, canola, flax, mustard, rapeseed, safflower, sunflowers, and rice eligible to enroll in the Direct and Counter-cyclical Program (DCP) under the 2002 farm bill. A farmer’s crop acreage base is reduced by the portion of cropland placed in the Conservation Reserve Program (CRP), but increased by CRP base acreage leaving the CRP. Farmers have the choice of base acreage used to calculate Production Flexibility Contract payments for crop year 2002, or the average of acres planted for crop years 1998 through 2001.
In the United States, deficiency payments are direct government payments made to farmers who participated in annual commodity programs for wheat, feed grains, rice, or cotton, prior to 1996.
In United States agricultural policy, the triple base plan, also called the flexible base plan, is a proposal under which farmers who raise program crops would receive program payments only on a certain percentage of their permitted acreage. A producer participating in a federal price support program actually would have three categories of base acres for program purposes:
The Food Security Act of 1985, a 5-year omnibus farm bill, allowed lower commodity price and income supports and established a dairy herd buyout program. This 1985 farm bill made changes in a variety of other USDA programs. Several enduring conservation programs were created, including sodbuster, swampbuster, and the Conservation Reserve Program.
The Direct and Counter-cyclical Payment Program (DCP) of the USDA provides payments to eligible producers on farms enrolled for the 2002 through 2007 crop years. There are two types of DCP payments – direct payments and counter-cyclical payments. Both are computed using the base acres and payment yields established for the farm. DCP was authorized by the 2002 Farm Bill and is administered by the Farm Service Agency (FSA).
Optional flex acreage is a term in United States agricultural policy.
Normal yield is an agricultural term referring to the average historic yield established for a particular farm or area. It is also used to describe average yields. Normal production would be the normal crop acreage planted multiplied by the normal yield. These measures, once required by commodity programs to calculate benefits, are replaced by base acres, payment acres, and payment yield under the 2002 farm bill.
In United States agricultural law, producers who grow a crop that is not eligible for crop insurance may be eligible for a direct payment under the Farm Service Agency’s Noninsured Crop Disaster Assistance Program (NAP). NAP has permanent authority under the Federal Crop Insurance Reform Act of 1994,.
The Integrated Farm Management Program (IFMP) was a program authorized by the 1990 farm bill to assist producers in adopting resource-conserving crop rotations by protecting participants’ base acreage, payment yields, and program payments. The program’s goal was to enroll 3 to 5 million acres (20,000 km2) over 5 years. The 1996 farm bill replaced the IFMP with production flexibility contracts and a pilot conservation farm option program.
In United States agricultural policy, Historic peanut producers are those producers who were actively involved in planting and harvesting peanuts in the 1998-2001 period. Under the 2002 farm bill, only these historic producers are eligible to receive fixed direct payments and counter-cyclical payments under the new peanut program, irrespective of whether or not they continue to produce peanuts. Payments made to these producers are based on past production on historical acreage.
Flex acreage — The Omnibus Budget Reconciliation Act of 1990 mandated that deficiency payments not be made on 15% of a farm’s crop acreage base, called normal flex acres. The acreage could be planted to any program crop, but not fruits and vegetables. An additional 10% of the farm’s base acreage could be flexed at the option of the operator. Flexing did not diminish the crop acreage base of a farm. The 1996 farm bill effectively provided total flexibility among all commodities, except for fruits and vegetables, and this policy was continued by the 2002 farm bill.
Wheat is produced in almost every state in the United States, and is one of the most grown grains in the country. The type and quantity vary between regions. The US is ranked fourth in production volume of wheat, with almost 50 million tons produced in 2020, behind only China, India and Russia. The US is ranked first in crop export volume; almost 50% of its total wheat production is exported.
References
This article incorporates public domain material from Jasper Womach. Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition (PDF). Congressional Research Service.
