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Iowa Ag Review

Abstract

The number one failure of current U.S. farm policy is its inability to control supply, at least according to some policy-makers and analysts. With guaranteed minimum prices, farmers are finding it in their interest to maintain high planted acreage, even as market prices remain low. Congress is unlikely to eliminate the price guarantees, so some advocates are looking for a return to acreage controls to raise market prices. Opponents of acreage controls argue that unilateral decreases in U.S. acreage would only encourage our competitors to expand acreage. The ultimate effect, they argue, would be less U.S. acreage, more acreage in foreign countries, and little price change.