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The United States paid allegedly around $20 billion in 2005 to farmers in direct subsidies as "farm income stabilization" [34] [35] [36] via farm bills. Overall agricultural subsidies in 2010 were estimated at $172 billion by a European agricultural industry association; however, the majority of this estimate consists of food stamps and other ...
The Farm Bills have a rich history which initially sought to provide income and price support to US farmers and prevent them from adverse global as well as local supply and demand shocks. This implied an elaborate subsidy program which supports domestic production by either direct payments or through price support measures.
This led to years of the highest farm subsidies in American history. [15] Direct payments also began in the late 1990s as a way to support struggling farmers, regardless of crop output. [17] These payments allowed grain farmers to receive a government check every year based on yields and acreage of the farm as recorded the previous decade. [15]
The Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127), 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.
More than 300 U.S. farm and commodity groups urged Congress in a letter on Monday to pass a long-delayed farm spending bill before the end of the year, as farmers face a projected decline in income.
Voicing concerns that "millionaire farmers" were reaping all the benefits of the farm bill legislation, a coalition of farm-state Senators pushed for these limits. Sen. Charles Grassley (R-IA) was vehement about lowering subsidy caps from $500,000 to $225,000 "we don't want 10 percent of the farmers getting 60 percent of the farm bill." [5]
Cotton growers in the US reportedly receive half their income from the government under the Farm Bill of 2002. The subsidy payments stimulated overproduction and resulted in a record cotton harvest in 2002, much of which had to be sold at very reduced prices in the global market. [44]
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.