Links: https://www.ers.usda.gov/webdocs/publications/42096/32943_aosupp_002.pdf
http://www.choicesmagazine.org/2003-3/2003-3-02.pdf)
The Federal Agriculture Improvement and Reform (FAIR) Act of 1996 was a pivotal adjustment for traditional farm policy programs in the United States. This legislation drastically changed the severity of government involvement in farm policy over the following seven years (1996 - 2002). The 1996 Act replaced traditional ‘deficiency payments’ with ‘productive flexibility contract-payments’ (effectively eliminating price supports and incentivizing farmers to work more). The other main goal of this legislation was to have the government help orient farmers to a growing international commodity-driven marketplace. This Act included three major Titles: commodity provisions, agricultural trade provisions, and conservation provisions. Furthermore, tough eligibility for these contract payments required farmers to have at least one crop or acreage base that participated in a production adjustment program from 1991 - 1995. After researching and evaluating the 1996 Fair Act, this article will address the following research questions: What were the social, economic, and political factors leading up to the 1996 Fair Act? How did the 1996 Fair Act affect the well-being of American farmers? What are the future implications of this legislation?
These new contracts were both fixed and de-coupled, which meant participating producers would receive direct government payments that were less affected by market prices (ERS, 1996). This strategy to stabilize the market was bold. Moreso, there were also numerous pre-existing political factors that led to this particular change in agricultural policy. For example, many farmers had begun to view traditional farm program rules and restrictions as hindrances to growth and productivity while the global agricultural economy had begun expanding through increased international trade. Other farmers wanted to diversify the crops they planted in order to comply with updated conservation requirements or respond more freely to changing market conditions. A federal budget deficit also strengthened the push for agricultural policy reform during the 1990’s. Farm program costs were already high, and government benefits were geographically being favored toward large-scale producers (ERS, 1996). High commodity prices during this period also weakened the need and desire to continue traditional farm income and price support programs.
The implementation of the 1996 FAIR Act significantly affected the well-being of American farmers and ranchers. The FAIR Act provided farmers with immense flexibility in decision-making, particularly when it came to the choice of which crops to plant for the upcoming season. Therefore, this act also posed a greater income risk to farmers, because new contract payments were still derived by market prices. It is also evident that many of these program benefits seemed to favor already well-established farms compared to new- and beginning-farms (Roberts & Key, 2003). However, it still remains imperative that the FAIR Act accounted the needs of smaller-scale farm operations when distributing these payments. I believe that using annual household consumption rates amongst farmers, while adjusting for conservation-acreage, may serve as a reliable figure for investigating the future implications of the 1996 Fair Act in greater detail.
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