Measuring Equity in Farm Support Levels (CRS Report for Congress)
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| Release Date |
Revised July 20, 2010 |
| Report Number |
RL34053 |
| Report Type |
Report |
| Authors |
Randy Schnepf, Specialist in Agricultural Policy |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Federal farm law mandates support for, among others, 21 "covered commodities." Support forthese agricultural commodities, as specified in the 2008 farm bill (P.L. 110-246) includes directpayments, counter-cyclical payments, and marketing loan benefits. Since 1996 a handful of theseprogram commodities-feed grains (corn, sorghum, barley, and oats), cotton, wheat, rice,soybeans, and peanuts (hereafter referred to as the major program crops)-have received over$160 billion or 72% of all U.S. farm program payments, primarily in the form of commodityprice and income support benefits.Large disparities in the relative levels of benefit among these commodities have led to questionsof equity. This report looks at available data for the major program crops and compares supportrates per unit, total payments, payments per harvested acre, payments as a share of the value ofproduction, and payments as a share of the total cost of production. In addition, price and incomesupport levels are compared to market prices. By all of these measures there has been little equityacross commodities. However, farmers often have argued for equity based on cost of production.Economists, on the other hand, would use trend (or a moving average of) market prices as thebasis for setting support prices in order to avoid market distortions and resource misallocations.
