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Abstract
The Food Security Act of 1985 sets the United States (U.S.) policy course for
the five years, 1986-1990, in the areas of farm product prices and farmer incomes,
agricultural production, food aid, and trade in agricultural products. It is clearly
an evolution of past policy, deeply rooted in the institutional processes of participatory
policymaking. The Act will have important implications for not only
domestic producers, consumers, agribusinesses, and taxpayers, but also product
agricultural exporters and importers around the world. Just as it was substantially.
affected by the current loss of export markets and the economic crisis in the
U.S. agricultural sector, its implementation and impacts will be affected in the
future by the unpredictable weather, macroeconomic conditions around the world,
and international trading policies. This article examines the development of the
policy embodied in the Act and analyzes its primary economic implications.
Although most provisions of the U.S. agricultural price and income policy that
had evolved over the past half century were continued, important changes were
made. The resulting policy closely mirrored the preferences revealed from research
concerning farmers and leaders of national agricultural and food interest groups.
Primary changes from the previous 1981 Act were: lengthening the duration to
five years; substantial lowering of the minimum price support levels; permitting
a gradual decline in the minimum target prices; providing for a whole dairy herd
buyout program; establishing export enhancement initiatives through credit,
promotion, and export payment-in-kind (PIK); and initiating major efforts to
increase farmland conservation and withdrawal of fragile lands from production. Likely implications of the new Act include: (1) lower product prices for agricultural
producers around the world, and also farmer incomes if there is no income
protection from national policies; (2) a similar but a less proportionate impact
on consumers; (3) a substantial burden on the U.S. Treasury, and possibly those
of the other nations as well, depending upon the type of policies followed; and
( 4) likely intensification in the immediate future of the economic conflicts and
negotiations between major agricultural trading nations of the world.
Research played a vital role in the development of the U.S. 1985 Act. Given
the turbulent, uncertain, and important nature of the agricultural and food sector
in the world, research is challenged to provide more and better knowledge for
future policymaking