Acreage Shifts under Freedom to Farm

Abstract

<p>The 1996 FAIR Act contains two vehicles to deliver financial support to farmers. Loan deficiency payments (LDPs) pay farmers the difference between loan rates and market prices when market prices fall below the loan rates. LDPs are paid on a perbushel- produced basis, so they are directly tied to production amounts of each eligible crop. The other vehicle is AMTA (Agricultural Market Transition Assistance) payments. These payments arrive regardless of which crop, if any, is planted. The lack of planting requirements is why the ’96 FAIR Act is also know as Freedom to Farm. (Of course, under the old programs, farmers also had complete freedom to plant what they wanted if they were willing to forego government aid.)</p>