Agricultural Policy in the United States: Evolution and Economics

Description

Agricultural Policy in the United States: Evolution and Economics traces U.S. agricultural policy from its colonial roots to the present, using economic concepts to analyze and interpret political and economic consequences. It also examines the processes by which agricultural policies are developed, and the government structure which supports the implementation of legislation passed by Congress. The book includes arguments for and against common tools of U.S. agricultural policy, without influencing the reader in a particular direction. Each chapter contains questions and exercises to support students' learning, and technical economic material is contained in optional appendices. This second edition examines the Agriculture Improvement Act of 2018 and sets the scene for future policy developments. Additionally, it looks at trade wars and the impact of Black Swan events like the COVID-19 pandemic on agricultural resilience. Cover Half Title Series Information Title Page Copyright Page Table of Contents Preface Acknowledgment 1 Introduction: What Is Agricultural Policy and Why Does It Exist? What Is Agricultural Policy? Why Does Agricultural Policy Exist? Market Failure Arguments Presented for U.S. Agricultural Policy Arguments Presented Against Having a U.S. Agricultural Policy Five Perspectives On Government Intervention in Agricultural Markets Agricultural Policy Evolution Agriculture Subsidies and Economic Efficiency Black Swan Events Used to Justify Agricultural Policy Societal Ideals and Policy Is Agricultural Policy Good Or Bad for Society? Measuring Policy Impacts Farm Bills Summary Notes Questions and Exercises 2 Economic Concepts Applied to Agricultural and Food Policy Basic Economic Concepts Revisited Economics Use in Assessing Agricultural Policy Demand and Policy Elasticity of Demand Farm and Industry Supplies and Government Subsidies Theory Versus Policy Policies Affecting Supply and Demand Subsidies Surpluses, “Carry-Over” Subsidized Production Costs Supply and Demand Are Interrelated Price Controls Production Controls Set-Asides Versus Acreage Allotments Marketing Quotas Marketing Orders Commodity Credit Corporation Loans Conservation of the Environment Valuing Conservation Benefits Acreage Conservation Reserve Easements Rationing Income Transfers Food and Nutrition Programs Putting It Together, a Beef Subsidy Example Winning the Passage of Agricultural Policies Assessing Policy Impacts Measures of Social Welfare, Gains, and Losses From Policies Agricultural Production Risks Are Unique Summary Questions and Exercises 3 Who Makes Agricultural Policy and How Is It Made? The Minority Politics of Agriculture The Policy-Making Process Who Makes Policy? Kings and Kingmakers The Iron Triangle Model Power Clusters How Is Policy Made? Process, From Policy Introduction to Implementation The Role of Congress and Committees in Policy Making The Funding Process for Authorized Programs Budget Committees’ Role House and Senate Agriculture Committees’ Importance Role of the Administration The Role of Congressional Staff Summary Appendix 3.1: USDA Offices Questions and Exercises 4 A Brief History and the Evolution of Agricultural Policy Ancient Agricultural Policy English Commodity Policy U.S. Agricultural Policy, 1776–1900 Infrastructure and Agriculture Slavery and Tenancy Land Grant Universities, Hatch and Smith-Lever Acts The Rise of Farmer Organizations Summary Appendix 4.1: Ancient Economic Policies Roman Food Policy What Actually Happened? English Corn Laws and Farmer Legislators What Actually Happened? U.S. Whiskey Rebellion, 1791–1794 What Actually Happened? Questions and Exercises 5 Early Twentieth-Century Agricultural Legislation Diseases and Food Contaminants The Golden Age of Agriculture and Its Aftermath Competition and Price-Fixing Summary Appendix 5.1: Economic Analysis of Early Twentieth-Century Agricultural Policies Quarantines and Food Inspection Related to Quarantines Price-Fixing and Cooperatives Questions and Exercises 6 McNary-Haugen and the Permanent Legislation to the 1950s Evolving Agricultural Policy McNary-Haugen The “Dirty Thirties” and Agricultural Legislation Protective Tariffs Versus Free Trade Parity 1933 Agricultural Adjustment Act Allotments, Marketing Quotas, Agreements, and Price Supports The Ever-Normal Granary 1935 Agricultural Adjustment Act (PL 74-320) Federal Surplus Commodities Corporation The Agricultural Marketing Agreement Act of 1937 (PL 75-137) Agricultural Marketing Orders and Agreements 1938, 1948, and 1949 Permanent Legislation 1938 Agricultural Adjustment Act (PL 75-430) The Agricultural Act of 1949 (PL 81-439) The Permanent Legislation’s Regulation of Supply and Prices 1954 Agricultural Act (PL 83-690) Wool and Mohair 1956 Agricultural Act (PL 84-540) Summary Appendix 6.1: McNary-Haugen, Support Plans, Tariffs, and Politics The 1930 Tariff Act and the 1934 Reciprocal Trade Agreement Act 1933 AAA Policies Farm Credit The Permanent, “Permanent Legislation” Questions and Exercises 7 The 1960s to Mid-1980s Transition and Farm Crises Budget Problems, Exports, Environmental Issues, and Farm Crises Agricultural Act of 1961 (PL 87-128) Food and Agricultural Act of 1962 (PL 87-703) Agricultural Act of 1964 (PL 88-297) Food Stamp Act of 1964 (PL 88-525) Food and Agricultural Act of 1965 (PL 89-321) Deficiency Payments and Target Prices The Food for Peace Act of 1966 (PL 89-808) 1970 Agricultural Act (PL 91-524) Federal Environmental Legislation Clean Air Act of 1970 (PL 91-604) 1972 Clean Water Act (PL 92-500) Research and Extension Agricultural and Consumer Protection Act of 1973 (PL 93-86) 1973 Russian Wheat Deal Food and Agricultural Act of 1977 (PL 95-113) Food and Nutrition Land Grant Universities Wheat Industry Council Farm Crises of the 1980s Agricultural and Food Act of 1981 (PL 97-98) Set-Aside and Acreage Reduction Programs 1982 Omnibus Budget Reconciliation Act (PL 97-253) 1983 Payment-In-Kind 1984 Agricultural Programs Adjustment Act (PL 98-258) Summary Appendix 7.1: Program Changes Export Enhancements and Surpluses Reductions Additional Program Payments Cotton Trade Agreements Conservation Program Payments Questions and Exercises 8 Planting Flexibility and Direct Payments, 1985–1996 A Different Approach 1985 Food Security Act (PL 99-198) Commodity Program Loan Reductions Extra-Long Staple Cotton Dairy Program Payments Advanced Payments Base Acres Program Payment Acreage and Yields Base Building Peanuts 0/92 and 50/92 Planting Flexibility 1985 Payment-In-Kind PIK and Roll Program Payment Limits Conservation Food Security Improvements Act (PL 99-260) Budget Reconciliation Acts of 1986 and 1987 Disaster Assistance Act of 1988 (PL 100-387) Ad Hoc Disaster Assistance Omnibus Trade and Competitiveness Act of 1988 (PL 100-418) 1990 Omnibus Budget Reconciliation Act (PL 101-508) Triple Base, ARP, NFA, OFA Food, Agriculture, Conservation and Trade Act of 1990 (PL 101-624) Loan Provisions of FACTA Acreage Reduction Encouragement – TOP Omnibus Budget Reconciliation Act of 1993 (PL 103-66) Payment Limits 1994 Federal Crop Insurance Reform Act (PL 103-354) Reorganization of the USDA 1996 Federal Agricultural Improvement and Reform Act (PL 104-127) New Flex and Payment Provisions Payment Limits Dairy Sugar Peanuts Conservation No More Farm Bills? Summary Appendix 8.1: 1985–1996, Budgets and Acreage Reductions Flexibility Possible Effects of ARP and Flex On Costs of Production Commodity Loan Programs Marketing Loan Calculation Loan Deficiency Payments Maximum Deficiency Payments Adjustments With Market Price Above the Findley Loan: A Corn Example Dairy Herd Buy-Out 1990 Farm Bill Flex Acres PFC Payments Questions and Exercises 9 Twenty-First-Century Agricultural Legislation Maintaining a Safety Net 2000 Agricultural Risk Protection Act (PL 106-224) 2002 Farm Security and Rural Investment Act (PL 107-171) Commodity Program Payments Landlord/Tenant Issues Tenant Protection Direct Payments Counter-Cyclical Program Payments CCC Loan Program Payments Options for Using the Non-Recourse Loan Program Certs Or Cash FSRIA Base Update 2002 Payment Limits Advanced Payments Trade Agreement Issues Brazilian Cotton Case COOL Controversy Peanut Program Changes Dairy – MILC 2004 American Jobs Creation Act (PL 108-357) 2004 Tobacco Transition Payment Program (TTPP) Food, Conservation and Energy Act of 2008 (PL 110-246) Authorizations and Reauthorizations Commodity Provisions Permanent Disaster Assistance and “SADA” Average Crop Revenue Election Program Dairy Provisions Sugar Loan Program 2008 Payment Limits Limited Resource, Economically Disadvantaged, and Beginning Farmers Nutrition Title Changes New Titles of the FCEA COOL Revisited The Agricultural Act 2014 (PL 113-79) Budget Issues Commodity Loan Program Provisions Agricultural Risk Coverage Price Loss Coverage Payment Limits Farm Program Base Acres Upland Cotton Generic Base Reallocation of Base Acres Allowed Dairy Provisions Commodity Program Payment Limits Conservation Conservation Reserve Program Working Lands Conservation Programs Agricultural Conservation Easement Program Regional Conservation Partnership Program Conservation Compliance Federal Crop Insurance Changes Crop Insurance Premium Adjustments Nutrition Assistance Specialty Crops, Organic Agriculture, and Food Safety Other Titles Summary Questions and Exercises 10 International Trade: Is It the Future of U.S. Agricultural Policy? U.S. Foreign Trade’s Role in Farm Policy Basic Tenets of Trade Government Intervention in Trade Trade and the Protective Response Trade Barriers Trade Issues Trade Deficits Third World Debt Agricultural Exports The U.S. Trade Representative Fast Track Authority International Trade Agreements World Trade Organization Uruguay Round of Trade Negotiations Regional Trade Agreements Canada–U.S. Trade Agreement North American Free Trade Agreement Free Trade Area of the Americas Other Regional and Bilateral Trade Agreements Trans-Pacific Partnership The Doha Round of Trade Negotiations Continuing Barriers to Free Trade U.S. State Trade Supports Summary of Trade Issues Suggested Reading Appendix 10.1 U.S.–China Trade Phase I United States–Mexico–Canada Agreement Questions and Exercises 11 Agricultural Policy Since 2014 2018 Bipartisan Budget Act (PL 115-123) 2018 Agricultural Improvement Act (PL 115-334) Consideration Involving Expiration of the 2014 Farm Bill Budget Considerations Commodity Program Payment Limits Commodity Safety Net Agricultural Risk Coverage Price Loss Coverage Loan Programs Dairy Programs Conservation Title Conservation Reserve Program Working Lands Programs Crop Insurance Title Whole Farm Insurance Nutrition Title Horticulture Title Miscellaneous Title and Animal Health Ad Hoc Disaster Assistance Market Facilitation Program (2018–2019) Coronavirus Food Assistance Program (2020) Other Initiatives Summary Notes Questions and Exercises 12 The Future of Agricultural Policy: A Policy Shift to Risk Management Economic Theory and Policy Historic Policy Responses Future Agricultural Policy? Cobweb Theorem Revisited Risk, Uncertainty, Conflicting Goals, and Policy Farm Relief and Multi-Year Farm Bills Agricultural Policy and Competing Agendas Outlawed and Undesirable Commodities and Inputs Historic Commodity Programs and Economic Convergence Acreage Limitation Programs ARC Versus PLC Loan Programs and Surpluses Disaster Programs Pandemics Summary Appendix 12.1: Government Shutdowns Questions and Exercises Index