Alternative Futures for American Agricultural Structure, Policies, Income, Employment, and Exports : A Recursive Simulation: Card Report 56, 1975

Past agricultural policies of supply restriction and price supports are inconsistent with the low commodity inventories and high prices we have experienced during the last several years. If the high export levels of the 1973 - 74 period indicate the beginning of further growth in t he export market, then a program of supply expansion would be desirable. However, such a pol icy may result in severe economic hardship for the farming industry if the growth in exports does not continue. Farm policies of the 1960s and early 1970s were characterized by programs of land diversion and price supports in order to maintain a reasonable return to agriculture relative to the nonfarm sector. During the period from 1961-72, farm programs diverted an average of 54.6 million acres of cropland each year. This represents approximately 27 percent of the total cropland planted to feed grains, wheat, soybeans, and cotton [38]. A series of unexpected events, such as crop failures in major importing countries, a decline in the anchovy harvest, and a devaluation of the dollar, combined to expand the foreign demand to almost double previous levels. Agricultural policies of the 1960s were not prepared for such an abrupt change of direction. The result was a drastic depletion of American inventories of agricultural products and rapidly rising prices. Consumer groups were vocal in demanding lower food prices, elimination of acreage restrictions, and new agricultural policies to increase food production