American Agricultural Policy and the 1990 Farm Bill

The United States (U.S.) government recently finished its five year ritual of farm legislation. In general, the 1990 Farm Bill, or the Food, Agriculture, Conservation and Trade Act of 1990, extends most of the program features of its predecessor, the Food Security Act of 1985 (FSA). The recent bill continues a 57 year old tradition represented by loan rates, target prices, deficiency payments, base acres and yields, quotas, production controls, marketing loans, and other devices which support prices and income in return for retiring acres. However, the bill introduces several features that move it incrementally in the direction of "decoupling", and continues the trend set in 1985 of adding new environmental restrictions on farm practices. The recently passed Farm Bill was shaped by four forces; these forces will continue to shape U.S. farm policy throughout the 1990s. First, the rising budget deficit compelled Congressional agriculture committee members to decrease the cost of their programs. Second, a call for more open agricultural markets by the Bush Administration coupled with the budget constraint made smaller and more flexible crop acreage bases the most attractive way to achieve incremental decoupling. Third, recent scares of pesticides and agricultural chemicals on or in food and groundwater have led to rising concerns over the impact of agriculture on the environment. Fourth, the Uruguay Round of trade negotiations was an important consideration in drafting the first farm bill of the 1990s.