The economic outlook for agriculture has taken a sobering turn since passage of the 1996 Farm Bill. From the UK College of Agriculture, here's Extension Public Policy and Development Economics Specialist Craig Infanger with details. That legislation, properly known as Freedom to Farm, gave producers much more planning flexibility, guaranteed most grain farmers payments for seven years, but exposed farmers to much more market risk. Now the unbridled optimism about ag. For soybeans and wheat, it appears we may harvest record crops this year barring some weather event hitting soybeans.
Tobacco is in a similar market situation.
This dramatic turn of events for ag. Tobacco producers still have the no-net cost price support system, but for grain farmers the basic safety net comes in the form of marketing assistance loans. Wheat producers are already eligible for the loans and loan deficiency payments. Corn and soybean producers may need the USDA's safety net before the marketing season is over. There's a big push underway in the US Senate coming mainly from grain producing states to bolster the saftey net by raising loan rates for grains.