SumnerAREUpdate2002v5n6_1 - VOL 5 NO 6 JULY/AUG 2002 Spring...

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Vol. 4 No. 3 Spring, 2001 Also in this issue. .................. Price, Promotion and Differentiation Effects of the Private-Label Invasion by M. B. Ward, J. P. Shimshack, J. M. Perloff and J. Michael Harris. .......... 3 Immigration and the Changing Face of Ventura County by Alfonso Guilin, Philip Martin and Edward Taylor. ...................... 6 In the next issue. .................. Information Systems in Agriculture by David Just and David Zilberman V OL . 5 N O . 6 J ULY /A UG 2002 A fter many months of legislative negotiation, the Farm Security and Rural Investment (FSRI) Act of 2002 was signed in to law by President Bush on May 13, 2002. For more than six decades, the United States has periodically renewed and reformulated legislation authoriz- ing domestic farm subsidy programs and related policies. The new “Farm Bill”, the latest in this long history, has received wide media attention around the globe and here in California. Farm bills are typically large and complex with many separate “titles” covering a variety of farm, food and rural issues. The FSRI Act is no exception and includes titles on such diverse topics as food assistance for the poor, research and extension support, food safety and aid to rural communities. This article will focus specifically on the parts of the bill that have major implications for commodity agriculture. Even then there are simply too many complicated wrinkles in the legisla- tion to cover them all here. This article is a preliminary survey of some commodity market implications of the new law with a particular emphasis on California. It is too early to have definitive results; even the specifics of implemen- tation of the law are yet to be finalized. However, we do have enough information to provide an overview of changes in the legislation and how it is likely to affect major markets. A closely related topic is how the FSRI Act relates to the U.S. com- mitments and negotiations in the World Trade Organization (WTO). The FSRI Act continues the traditional farm programs by providing almost all the direct support to a relatively small hand- ful of commodities. Most of the direct payments are provided to wheat, feed grains (mainly corn), oilseeds (mainly soybeans), cotton and rice. Dairy is also supported with payments and market regulations, and program support is also provided to some minor crops. Most commodities in California receive relatively little direct support from farm subsidy programs. California typically produces about 15 percent of farm value in the United States and will likely receive less than five percent of the farm payments authorized in the FSRI Act (most of which go to California’s rice and cotton industries). Overall, about 70 percent of farm value produced in Cali- fornia, including production of fruits, tree nuts, vegetables and melons, and meat animals, receive almost no direct support from Farm Bill subsidies.
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SumnerAREUpdate2002v5n6_1 - VOL 5 NO 6 JULY/AUG 2002 Spring...

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