Abstract
From President Jimmy Carter’s grain embargo to punish the Soviet Union for its invasion of Afghanistan, to emergency drought relief in 1989, policymakers of this era were constantly reacting to outside forces that impacted agricultural markets. Dairy surpluses and growing stocks of grains prompted a series of policy corrections to balance markets. The agricultural financial crisis of the mid-1980s required several legislative responses to stabilize the Farm Credit system. A widespread drought starting in 1988 resulted in two emergency Congressional reactions. This chapter reviews all of these developments and the beginning of conservation compliance and liberalized trade.
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Notes
- 1.
The governments of Australia, Canada, and the European Community agreed to not export more than “normal and traditional amounts” of grain to the Soviet Union during the US embargo, but that phrase was never defined and those countries’ sales to the USSR did increase during the lifetime of the embargo.
- 2.
Representative Foley became House Speaker in 1989, then lost re-election for his seat in Congress during the so-called Republican Revolution election of 1994.
- 3.
Budget reconciliation instructions are sometimes incorporated in annual budget resolutions. A budget resolution is a ten-year budget framework that Congress is supposed to adopt on an annual basis under Congressional budget rules. It is not considered legislation and is not sent to the president for his approval or disapproval.
- 4.
Total projected savings from this legislation was $130 billion over three years, as a result of cuts to Medicaid, health and education block grant programs, student loans, and the minimum Social Security benefit, in addition to the farm program reductions described above.
- 5.
Some members of this Boll Weevil group, such as Phil Gramm and Billy Tauzin, eventually switched to the Republican Party.
- 6.
Unlike wheat, feed grains, and cotton, the sugar loan program is based on partially processed sugar rather than the raw commodity, since sugar beets and sugar cane are relatively perishable compared to the other highly storable row crops.
- 7.
By the end of the 1980s, the US inflation rate had declined to pre-Vietnam War levels.
- 8.
While contract rates on debt in the 1970s could be very high by historic standards, the difference between the contract rate and the rate of inflation might be only one to 2 percent. There were months during this period when real interest rates were negative.
- 9.
Government stocks in the form of the CCC or the Farmer Owned Reserve accounted for 131 percent of the increase in corn ending stocks—privately held stocks actually declined by nearly 60 percent between the two years.
- 10.
The certificates were dollar denominated for specified amounts of commodities. Grains redeemed through the use of PIK certificates could be utilized for any purpose, but were ineligible for entry into the CCC loan or FOR programs.
- 11.
Extra-long staple cotton, or ELS cotton, is a variety of cotton produced primarily in California and other Southwest states. Under USDA definitions, a cotton variety qualifies as ELS if its staple length is an inch and 3/8ths or longer. In the 2018/2019 crop year, ELS cotton production accounted for less than 5 percent of total US cotton production. Also known as Pima cotton.
- 12.
Representative Findley lost re-election to his House seat in 1982, but the idea came from legislation he offered during his last term in the House.
- 13.
For cropland to be “considered planted,” it either had to be land idled due to program requirements, such as the ARP, land not planted due to natural disasters, or the difference between permitted planted acres and planted acres, if that land was producing non-program crops.
- 14.
USDA defines highly erodible land (HEL) as land with a soil erodibility index of greater than 8.
- 15.
The drought also affected the prairie provinces of Canada.
- 16.
The 1988 US soybean crop fell less dramatically because a portion of that crop is grown in the Delta and Southeast states, regions which were not hit by the drought.
- 17.
Aflatoxin is a toxic substance produced by molds that infect crops such as corn and peanuts under conditions of drought and extreme heat.
- 18.
Representative Madigan would go on to serve as Secretary of Agriculture for President Bush in 1991–1992.
- 19.
His famous comment was “Read my lips—no new taxes.”
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Mercier, S.A., Halbrook, S.A. (2020). Government Stockholding. In: Agricultural Policy of the United States. Palgrave Studies in Agricultural Economics and Food Policy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-36452-6_15
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