Farm late 1990’s congress added new farm program

Farm subsidies were brought into action in the United States during the Great Depression (1929-1939) to provide economic stability to farmers and to ensure a steady domestic food supply for Americans. A large percentage of farmers were losing their money due to the Great Depression. A long period of constant overproduction caused extremely low prices and a severe farm crisis. While millions of Americans went hungry due to lack of funds, farmers were stuck with huge food surpluses that people couldn’t afford to buy. During the early years of the Depression the overall farm income was cut in half. The Agricultural Adjustment Act was created in 1933 by Franklin D. Roosevelt. The Agricultural Adjustment Act created the Agricultural Adjustment Administration, also known in short as the AAA. The AAA offered subsidies to farmers to encourage them to willingly limit the amount of crops that they were producing. Farmers that agreed to the limit their production were paid a subsidy. In short, farm subsidies were a way to save thousands of small farmers on the brink of disaster. At the time this subsidies worked like a charmed and seemed to do great things in the United States economy during this time of need, but have subsidies ran their course? Should farm subsidies be a thing of the past? THESISThe subsidized crop benefits may have started in the 1930’s and for good reason, but since they have altered hazardously. In the late 1990’s congress added new farm program called “direct payments.” The government monitored the check and distributed them based on land ownership and past production levels. Farmers received the checks regardless of the market price and how much they produced, rain or shine farmers were getting paid. The Washington post found that in 2005 the government gave more than $1.3 billion to people who did not farm at all. The money could have went to another branch of agriculture that had more of a need for it. The Washington Post also stated that, “In 2005 alone when pretax farm profits were at a near-record $72 billion , the federal government handout nearly $25 billion in aid…” So even though the farming side of agriculture was at an economic high they were still receiving a substantial amount of monetary help from the government that many economists would say was unnecessary. In 2014 the system of direct payment subsidies was removed.Today the U.S. government pays approximately $20 billion annually to farmers and other workers in the agricultural business. More than 800,000 farmers and landowners receive subsidies, but the payments are heavily tilted toward the largest producers. More than 90 percent of these agriculture subsidies go to the farmers of one or more of five crops — wheat, corn, soybeans, rice, and cotton.Farmers have an inelastic demand, which means that the demand for their products, crops, does not increase or decrease correspondingly with a fall or rise in the price of those said crops. So even though the price of corn may be decreasing, doesn’t necessarily mean more people will want to buy corn. Less than 2% of Americans are currently involved in production agriculture.