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Abstract

The proposed 2007 farm bill contains fundamental shifts in policy option mainly dictated by a desire to render the U.S. agriculture “more market oriented’ and the programs less costly to the U.S. treasury. The proposal adopts a revenue-based counter cyclical payment while maintaining the current price-based counter cyclical payment scheme. Under the revenue-based system, payment would be triggered when the actual national revenue per acre falls below the national target revenue per acre. The choice is left to producers who will be allowed a one time option to select one of these two schemes.

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