Should Halt Agriculture's Decline Testifying before the U.S. House Agriculture Committee recently, a University of Tennessee economist argued that any new farm bill should address the reasons for the decline in farm prices. He said that before writing a new farm bill, Congress must know whether the problems we're seeing in crop agriculture are short-term aggravations or serious, lifelong ailments. Ray said the 1996 farm bill is based on four assumptions. Growing exports, especially to China, will propel crop agriculture into a new era of prosperity. Farmers will respond to market signals, planting less when prices decline and more when prices increase.
Consumption increases when prices are low.
Crop markets will correct in a reasonable time without devastation. Under the present bill, farmers have no incentive to reduce production as prices decline. So any reduction only means less revenue. Consumption of food will only increase to a point because of low prices. As for crop markets, the supply grows rapidly, while exports are relatively flat.