Part of the economic reforms instituted in the wake of the Depression and the Dust Bowl by President Franklin Roosevelt's New Deal, grain subsidy programs were developed to control production, guarantee a market price for farmers and assure an abundant and cheap food supply for the American people. While many people denounce the programs, most agree that, in some aspects, they have been a success. The most recent form of subsidy payments began in the 1970s when Congress implemented a deficiency payment program that was modified over the years but continued until 1995. If farmers enrolled in the program sold their product on the open market for a price below the government's target price, the feds paid the difference on 85 percent of their crop. To keep the subsidies coming each year, farmers were required to grow the same crop, with only slight variations.
Farmers remain coy as to whether they made a profit at that price.
According to industry experts, there are a bushel of variables to consider, including whether the farmer owns the land, the farming methods used and location. The fight for profits That isn't to say the price subsidies were making farmers rich. Just about everyone agrees that making a living at farming is getting more and more difficult, even with federal subsidies. Farmers have always been free to farm what they want when they want, but federal subsidies have been so attractive that the vast majority have had little choice but to sign up and follow the federal rules. They may detest the voluntary subsidy program, but the fact remains they are hooked and haven't been able to live without it.