Problems With Agricultural Subsidies In The United States

2256 words - 9 pages

In the 1920's, farmers were encouraged to increase food production to keep up with the demand for food caused by World War I. After the war ended, production stayed at a high level, which led to a large surplus in agricultural products. The large surplus caused a steep drop in the price for the products. The drop in prices caused the market value for crops to go down and made things tougher on the economy. The United States government decided that the best way to correct the market was to put a limit on how many acres that farmers could grow. The government would pay farmers to grow nothing more than their allotted acreage. This allowed farmers to continue making money while the government controlled the surplus and kept the market prices at a reasonable level. In a personal interview with Anne Allen from the Williamson County Farm Service Agency, she explained that farmers are payed to grow at or below their acreage and that they don't have to grow every year to get payed for their acreage. However, they do have to raise crops for two out of every three years or they lose their acreage and subsequently lose their subsidy.

Franklin D. Roosevelt's New Deal made sweeping changes in agriculture. Agricultural subsidies were first introduced into the United States in 1933 by the Agricultural Adjustment Act, which was created to control the production of basic crops. The Commodity Credit Corporation would only make loans to farmers who had agreed to the government's production control policies. Similar adjustments had to be made after World War II and the Korean War. Most of the subsidies were payed out to the cotton, wheat, and feed grain industries (Agricultural Subsidies).

Although many are against agricultural subsidies, there are some up sides to them. One of the biggest payoffs of government subsidies is that they keep our domestic industries running. Many farmers would be hurt by the low prices of foreign competition. The government allows farmers to sell at market cost or even below market cost and then makes up for it by giving the farmers money for staying within their quota. This allows farmers to make more of a profit without producing an excess of crops. Subsidies add income to what farmers make, which is important because the price of the product is lowest when being sold from the farmer to the free market. Subsidies also lend help to farmers who have a bad harvest of crops. Many factors influence the size of a crop a farmer has, including weather, insects, and the occasional fire. If the conditions are right, farmers can have great harvests every year, but that doesn't always happen. Most of the time when farmers have below average harvests, a drought is to blame. Even though the subsidy won't allow the farmer to gain as much money as a full crop would, it does allow him to make more money than if he had no subsidy to fall back on at all. One year when my family raised tobacco, we had a horribly dry summer, and it ruined our...

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