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Abstract
The 1996 Federal Agriculture Improvement and Reform Act (FAIR) contained
important breaks with a tradition of crop-by-crop subsidies dating back to the
Agricultural Adjustment Act of 1933. Farmers with recorded base acres were given
the opportunity (which nearly all accepted) to sign a seven-year `contract' with the
US Department of Agriculture (USDA), under which payments will be continued
on the merged base acres on a declining schedule until the year 2002. FAIR is an
unfinished agenda. First, the coverage of `freedom to farm' is only partial, with
numerous commodities left out of the decoupling programme. Second, the largest
producers will augment their already significant receipts with generous lump sum
transfers from USDA. This will further reinforce the concentration of roughly 90
per cent of receipts and payments in the hands of the 100 000 to 200 000 largest
producers of field crops. An alternative would be to make payments in times of low
marketing receipts which recede when prices are high.