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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, 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 a strong 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.
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 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 Market Transition Act (AMTA) — Title I of the 1996 farm bill — allowed farmers who had participated in the wheat, feed grain, cotton, and rice programs in any one of the 5 years prior to 1996 to enter into 7-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 6-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.
Contract acreage — Base acres enrolled annually in the Direct and Counter-cyclical Program (DCP) authorized by the 2002 farm bill for covered commodities during crop years 2002 through 2007. Previously, the 1996 farm bill authorized 7-year production flexibility contracts, which guaranteed fixed direct payments but not counter-cyclical target price deficiency payments. The new law uses the term agreement rather than contract, but farmers must sign a Direct and Counter-cyclical Program Contract.
The Food, Agriculture, Conservation, and Trade (FACT) Act of 1990 — P.L. 101-624 was a 5-year omnibus farm bill that passed Congress and was signed into law.
Crop acreage base is a crop-specific measure equal to the average number of acres planted to a particular program crop for a specified number of years. The crop-specific nature of this measurement was important prior to the 1996 farm bill, which adopted an inclusive measure of base acreage and allowed planting flexibility among the program crops. The sum of the crop acreage bases for all program crops on a farm could not exceed the farm acreage. The acreage base was used in determining the number of acres a farmer, under an acreage reduction program, had to remove from normal crop production and devote to conserving uses in order to be eligible for USDA price and income supports.
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.
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.
In United States agricultural policy, the set-aside program was a program under which farmers were required to set aside a certain percentage of their total planted acreage and devote this land to approved conservation uses in order to be eligible for nonrecourse loans and deficiency payments. Set-aside acreage was based on the number of acres a farmer actually planted in the program year as opposed to being based on prior crop years. The authority for set-aside was eliminated by the 1996 farm bill.
In the United States, a production flexibility contract is a 7-year contract covering crop years 1996-2002, authorized by the 1996 farm bill between the Commodity Credit Corporation (CCC) and farmers, which makes fixed income support payments. Farmers were given production flexibility and diversification options on their contract acres not previously allowed on base acres. Each farm’s total payment was the payment rate times the payment quantity for participating base acres. In exchange for annual fixed payments, the owner or operator agreed to comply with the applicable conservation plan for the farm, the wetland protection requirements currently in law, and the constraints on growing fruits and vegetables on contract acres. Land enrolled in a contract had to be maintained in an agricultural or related activity. The law stated that not more than $35.6 billion would be paid over the 7-year period, in declining annual amounts from $5.3 billion in FY1996 to $4.0 billion in FY in 2002. The annual payments were allocated among commodities similar to historical deficiency payments, with 53.6% going to feed grains, 26.3% for wheat, 11.6% for upland cotton, and 8.5% for rice. Target prices and deficiency payments, authorized in the 1973 farm bill, were eliminated. The 2002 farm bill replaced this 7-year contract with an annual producer agreement (contract) required for participation in the Direct and Counter-cyclical Program (DCP).
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.
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.
Market transition payments are made to farmers under Title I of the 1996 farm bill. These payments were replaced by direct payments in the Direct and Counter-cyclical Program (DCP) of the 2002 farm bill.
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.
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.
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