Debts relative to assets have increased steadily since 1993. Farmers are twice as likely to have debt greater than 70 percent of assets, a high risk level, than existed in 1993. Government Policy Government policy has played a very important role in North Dakota agriculture. The first major government farm program was the Agricultural Adjustmentment Act in 1933. Over the decades, many farm programs have provided payments to producers to restrict supply, in an attempt to enhance farm income and bolster commodity prices.
Past examples are the soil bank, diverted acres, and set-aside acres.
Also, payments would be made regardless of crop grown, therefore producers could better react to markets signals when deciding what crops to grow. At the time of the farm bill debate, exports and prices were strong. However, successive years of high production around the world and weakened demand from Asia caused prices to plummet below farm program marketing loan rates. The marketing loan rates are below cost of production but provide some income protection. The grain can then be forfeited in lieu of loan repayment or it can be repaid using the posted county price.